Industrialists worried as gas crisis worsens in winter

In December, there was some improvement in the supply of gas to industries, but after a month the crisis has come to the surface again.

As a result, in addition to the disruption of production, the cost of running factories with alternative energy has increased.

Amid such a situation, the government's move to increase gas prices once again has made entrepreneurs worried.

Infographic: TBS

According to entrepreneurs, gas supply has drastically dropped in most areas of Narayanganj and Gazipur and in other gas-intensive industrial areas, including Manikganj, Mymensingh, and Munshiganj. There is hardly any gas pressure in the industrial areas of Manikganj, prompting entrepreneurs to think of relocating their factories.

The majority of industrial gas consumption in the country is used in the spinning, dyeing, and finishing units of textile mills. Apart from this, several industries, including ceramics, steel, and food processing factories, are gas-intensive.

Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA), told The Business Standard, "If gas is not available, and the price goes up, it will be a sorrowful state for industries."

According to sources at the Energy and Mineral Resources Division, on the heels of a recent power price hike, retail gas prices may also go up by around 17%, inflicting fresh inflationary pain on industrial consumers.

The country requires an average of 3,500 mmcf of gas per day, of which the current shortfall is about a quarter.

As gas supply improved in December last year, the chairman of the state-owned oil and gas corporation Petrobangla said that gas supply would improve until February. Demand will pick up in March, while the authorities are trying to normalise supply at that time.

According to the Bangladesh Power Development Board, electricity demand has now dropped to 10,000–10,500 MW from 13,000–13,500 MW in June-July of last year as fans and air conditioners remain off in winter.

As electricity demand has dropped, entrepreneurs have expressed the hope that the supply of gas to industries will increase during this time.

But even before the start of summer, the gas crisis in industrial areas has increased concern among entrepreneurs.

Apart from the industry, there have been reports that the gas pressure has decreased in households in different areas of the capital.

Along with this, it has recently been reported that some areas are experiencing power outages.

However, industrialists say that load shedding has decreased compared to the situation in the previous few months. Entrepreneurs in the Bscic Industrial Estate in Fatullah, Narayanganj, said that they have seen a great improvement in power supply this month. But in Munshiganj's Muktarpur area, more than four and a half hours of load shedding were reported on Monday.

Mahmud Hasan Khan Babu, managing director of Rising Knit Textiles Ltd, a sister concern of Rising Group, told TBS, "My factory in Manikganj has a gas approval of 15 psi (pounds per square inch), but it remains at zero during the day. A maximum of 1.5 psi is available at night. I am tackling some shortages from the Rural Electrification Board (REB) connection, which is incurring additional costs.

"Furthermore, we have to buy diesel to generate steam for boilers. Earlier, the gas bill used to be Tk20-25 lakh per month. But now the expenditure has increased to more than Tk1 crore, which has pushed up the cost of production."

"We are surviving because there is no bank loan. But those who have bank loans will not survive," he added.

He demanded gas rationing, similar to electricity rationing, to protect the industrial owners in this area.

According to entrepreneurs, about 50 factories are gas-based in the area. As the gas supply situation did not improve, some of them started shifting their factories to other places.

Entrepreneurs in Narayanganj said that the gas pressure was zero in the Madanpur area on Monday afternoon. The maximum pressure was 0.5 psi in the Fatullah Bscic area and 1.5 psi in the Kanchpur Bscic area.

Mohammad Hatem, managing director of MB Knit Fashion Limited, told TBS, "It is only possible to operate boilers at 1.5 PSI pressure. To run dyeing units, industrial owners must purchase more expensive diesel."

He said at least 1,000 factories, including dyeing and spinning mills, are dependent on gas.

Khorshed Alam, chairman of Little Star Spinning Mills Limited, stated that during the day, his Ashulia factory in Savar has a maximum gas pressure of 2 psi, which makes spinning impossible. He can only run the factory if the pressure increases at night.

Due to this situation, Khorshed Alam said that he is looking for a way to sell off one of the two spinning mills.

However, the supply situation in the area from Mauna to Dhanua in Gazipur is good, according to industrial owners there. But there is a crisis in Bhaluka of Mymensingh.

Apart from textiles, the ceramics sector is also suffering from severe gas shortages.

Moynul Islam, vice-chairman of Monno Group, told TBS, "Due to the gas crisis, production has been reduced by half, and the number of workers has also decreased at the same rate."

He requested that the government allow their industries to store bottled gas in the same way as it is stored at CNG stations, saying that if this is done, it can be used to run production during emergencies.

This correspondent called Petrobangla Chairman Zanendra Nath Sarker to get his response to these issues, but he did not pick up the phone.

Entrepreneurs afraid of defaulting due to losses

The country's textile and garment industry is seeing a fresh investment of $4 billion over the next two years. If the gas supply situation does not improve, entrepreneurs are also afraid of defaulting on bank loans due to losses.

Fazlul Hoque, managing director of Israq Spinning Mills Ltd and vice-president of BTMA, told TBS, "Yarn prices are on the decline. Orders are also low. Gas prices are going to increase again.

"In this situation, if there is no gas supply, then the cost of production will go up. Factories will face losses. Many entrepreneurs will go bankrupt due to these reasons."