Daily Policy Advisor archive (139)
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Industrial Energy Bottlenecks: Emergency Gas, Power, and Fuel Triage for Factory Continuity

Situation Industrial output is falling under a gas and power supply gap that has become a daily structural constraint. The Dhaka Chamber of Commerce and Industry estimates the energy crisis is costing the industrial sector up to Tk 2,387 crore per day in lost economic output [The Daily Star, 21 & 22 August 2026]. Even if factories operate at 55 percent capacity, daily output losses remain approximately Tk 1,074 crore [The Daily Star, 21 August 2026]. Manufacturing sector growth has slowed to 2.86 percent in FY 2025-26 from 3.71 percent the previous fiscal year [The Daily Star, 21 August 2026]. The immediate policy problem is not only supply restoration but allocation: who receives continuous gas and power while the active gas deficit is 1,380 to 1,770 mmcfd, a supply gap of roughly 36 percent to 46 percent [The Daily Star, 21 August 2026].

Evidence

  • Gas demand stands between 3,800 and 3,850 mmcfd, actual supply between 2,030 and 2,420 mmcfd, leaving an active daily deficit of 1,380 to 1,770 mmcfd [The Daily Star, 21 August 2026].
  • Around 930 mmcfd of available gas is allocated to power generation plants generating about 5,200 MW, starving industrial hubs of continuous pressure for boilers and captive generators [The Daily Star, 23 August 2026].
  • The power generation shortfall exceeded 3,000 MW to 3,500 MW during peak periods, forcing distribution utilities to enforce nationwide load-shedding of around 1,500 MW per hour [The Daily Star, 22 August 2026].
  • Narsingdi sizing, dyeing, and spinning factories are suffering an average daily production loss of Tk 300 crore [The Business Standard, 20 August 2026]. More than 100 factories suspended operations as gas pressure dropped to near zero against a normal threshold of 10 to 15 PSI [The Business Standard, 20 August 2026]. At least 50 to 100 textile and sizing mills resorted to firewood and timber in steam boilers, with fuel expenses above Tk 10,000 per day per factory [The Business Standard, 20 August 2026].
  • Meghna Group halted all operations across 57 factories, including 12 essential consumer goods units employing over 65,000 workers, on August 10 due to simultaneous gas and power cuts [Dhaka Tribune, 15 August 2026]. Supply later resumed at roughly 60 percent of normal pressure, leaving output below standard capacity [The Daily Star, 18 August 2026].
  • TK Group closed 20 of its 28 processing factories due to gas shortages [Dhaka Tribune, 15 August 2026]. Nabil Group production capacity across 20 manufacturing units fell to 40 to 50 percent [Dhaka Tribune, 15 August 2026]. In the Habiganj Industrial Belt, 171 factories completely stopped or restricted operations [Dhaka Tribune, 15 August 2026].
  • In the steel sector, gas pressure at BSRM was around 50 percent of normal requirements, forcing major re-rolling mills to operate at below half capacity using diesel and furnace oil [The Daily Star, 18 August 2026].
  • The Ashuganj Fertiliser Factory, with capacity of 1,000+ tonnes per day, and 5 other major domestic urea plants remain non-operational due to feedstock diversion [The Times of India / AFP, 23 August 2026].
  • BAPI reports that diesel generators cost Tk 41 to Tk 42 per kWh compared with a national grid tariff of about Tk 15 per unit, and reliance on diesel and furnace oil has driven factory energy costs up by 75 percent to 80 percent [Prothom Alo, 22 August 2026].

Prescription

  1. The Ministry of Finance, NBR, and Bangladesh Bank should activate an emergency industrial fuel-cost offset. NBR should issue a time-bound duty rebate or deferral on diesel and furnace oil for factories operating below normal gas pressure. Bangladesh Bank should allow deferred payment or working-capital finance against verified fuel invoices. The mechanism targets the gap between diesel generation at Tk 41 to Tk 42 per kWh and grid supply at about Tk 15 per unit [Prothom Alo, 22 August 2026].
  2. The energy and power ministry should issue a temporary gas re-prioritisation order. Review the allocation of around 930 mmcfd now used for about 5,200 MW of power generation [The Daily Star, 23 August 2026] and move defined volumes to continuous-pressure industrial use, beginning with Narsingdi textile and dyeing units, the Habiganj Industrial Belt, and steel re-rolling mills. The mechanism is a published priority load list, not a negotiated or ad hoc release.
  3. The Power Division and distribution utilities should convert load-shedding into an industrial protection schedule. The nationwide load-shedding of around 1,500 MW per hour [The Daily Star, 22 August 2026] should be shifted away from essential consumer goods lines, especially the 12 Meghna units employing over 65,000 workers [Dhaka Tribune, 15 August 2026], and from Habiganj, where 171 factories have stopped or restricted operations [Dhaka Tribune, 15 August 2026].
  4. The Ministry of Industries, with the energy and power ministry, should restore fertiliser feedstock as a protected gas use. The Ashuganj Fertiliser Factory, with capacity of 1,000+ tonnes per day, and 5 other major domestic urea plants are non-operational due to feedstock diversion [The Times of India / AFP, 23 August 2026]. The mechanism is to classify urea feedstock as non-discretionary and allocate it before lower-priority power generation.

Risks and tradeoffs The main risk is that moving gas away from power generation deepens an already severe power shortage. The power generation shortfall has exceeded 3,000 MW to 3,500 MW at peak periods, and utilities are already shedding about 1,500 MW per hour [The Daily Star, 22 August 2026]. Industrial gas priority may therefore increase load-shedding elsewhere unless the power sector reduces losses or imports fuel immediately. A fiscal danger is that subsidising or deferring duty on diesel and furnace oil will widen the revenue loss while factory energy costs are already up by 75 percent to 80 percent [Prothom Alo, 22 August 2026]. Preferential treatment for large industrial groups may also shift shortages to smaller units; Narsingdi already has more than 100 factories suspended and Habiganj has 171 factories stopped or restricted [The Business Standard, 20 August 2026; Dhaka Tribune, 15 August 2026]. Finally, the temporary switch to firewood and timber by 50 to 100 Narsingdi mills, at fuel expenses above Tk 10,000 per day per factory, carries safety and environmental costs that no emergency gas plan should entrench [The Business Standard, 20 August 2026].

Bottom line Industrial energy losses are already running up to Tk 2,387 crore per day, and the gas deficit of 1,380 to 1,770 mmcfd is too large to be solved by procurement alone [The Daily Star, 21 & 22 August 2026; The Daily Star, 21 August 2026]. The Ministry of Finance, NBR, the energy and power ministry, and the Power Division must now run an explicit allocation triage that protects essential factories, fertiliser production, and exports before the manufacturing slowdown becomes entrenched.

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Sources

  • The ongoing energy crisis is costing the industrial sector up to Tk 2,387 crore per day in lost economic output, according to estimates by the Dhaka Chamber of Commerce and Industry (DCCI) presented by DCCI President Taskeen Ahmed. [The Daily Star, 21 & 22 August 2026]
  • The DCCI estimated that even when factories operate at 55 percent capacity, daily output losses stand at approximately Tk 1,074 crore. [The Daily Star, 21 August 2026]
  • Bangladesh's manufacturing sector growth slowed to 2.86 percent in FY 2025–26, down from 3.71 percent the previous fiscal year according to DCCI data. [The Daily Star, 21 August 2026]
  • Daily national gas demand stands between 3,800 and 3,850 million cubic feet per day (mmcfd), while actual supply has hovered between 2,030 and 2,420 mmcfd, leaving an active daily deficit of 1,380 to 1,770 mmcfd (a supply gap of roughly 36% to 46%). [The Daily Star, 21 August 2026]
  • Approximately 930 mmcfd of available gas is being allocated to power generation plants (generating ~5,200 MW), starving industrial hubs of continuous pressure required for boilers and captive generators. [The Daily Star, 23 August 2026]
  • The power generation shortfall exceeded 3,000 MW to 3,500 MW during peak periods, forcing distribution utilities to enforce nationwide load-shedding of around 1,500 MW per hour. [The Daily Star, 22 August 2026]
  • The Narsingdi Chowala Textile Industry Owners Association reported that local sizing, dyeing, and spinning factories are suffering an average daily production loss of Tk 300 crore. [The Business Standard, 20 August 2026]
  • More than 100 factories in Narsingdi suspended operations as gas pressure dropped to near zero (against a required normal threshold of 10–15 PSI). [The Business Standard, 20 August 2026]
  • At least 50 to 100 textile and sizing mills in Narsingdi resorted to burning firewood and timber in steam boilers to maintain minimal output, incurring fuel expenses of over Tk 10,000 per day per factory. [The Business Standard, 20 August 2026]
  • Meghna Group of Industries halted all operations across 57 factories (including 12 essential consumer goods units employing over 65,000 workers) on August 10 due to simultaneous gas and power cuts. [Dhaka Tribune, 15 August 2026]
  • Limited supply later resumed at Meghna Group of Industries at roughly 60 percent of normal pressure, restricting output below standard operating capacity. [The Daily Star, 18 August 2026]
  • TK Group closed 20 of its 28 processing factories due to gas shortages. [Dhaka Tribune, 15 August 2026]
  • Nabil Group production capacity across 20 manufacturing units fell to 40–50 percent. [Dhaka Tribune, 15 August 2026]
  • In the Habiganj Industrial Belt, 171 factories completely stopped or restricted operations. [Dhaka Tribune, 15 August 2026]
  • In the steel sector (BSRM), gas pressure hovered around 50% of normal requirements, forcing major re-rolling mills to operate at below half capacity using diesel and furnace oil. [The Daily Star, 18 August 2026]
  • State-owned plants, including the Ashuganj Fertiliser Factory (capacity of 1,000+ tonnes/day), remain non-operational alongside 5 other major domestic urea plants due to feedstock diversion. [The Times of India / AFP, 23 August 2026]
  • According to the Bangladesh Association of Pharmaceutical Industries (BAPI), running diesel generators costs Tk 41 to Tk 42 per kWh (unit), compared to the national grid tariff of approximately Tk 15 per unit. [Prothom Alo, 22 August 2026]
  • Reliance on diesel and furnace oil to offset gas shortfalls has driven factory-level overall energy costs up by 75 percent to 80 percent according to BAPI. [Prothom Alo, 22 August 2026]

Grounded in 11 source documents in the evidence record.

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Topics ranked by gemini-3.7-flash; prescription drafted by deepseek-v4-pro; grounding verified by gemini-3.7-flash. Generated 2026-08-23T11:37:35.380046+00:00.