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Industry owners paying increased gas price, but not getting promised supply

09 April 2023
Industry owners paying increased gas price, but not getting promised supply

The ongoing gas shortage continues to hurt the textile industry despite the government's move to inject additional 300 million cubic feet (mmcf) of gas into the national grid as some gas-based power plants that resumed operation during Ramzan are utilising much of the added gas. The added gas is being utilised in power plants that became operational to keep the electricity supply stable during Ramzan. Besides an Economic Zone in Rupganj of Narayanganj that specialises in food grain production enjoys priority in utility supplies. As a result, the textile factories in the zone are getting little or no benefit.

The factories in Narayanganj zone, home to some 100 textile mills, have been suffering due to the disrupted gas supply although they are now paying a higher price for gas. Gas supply to factories in Gazipur and Mawna areas has, however, improved a little. BTMA said they are paying more for gas but the gas supply situation has not improved. In this situation, the cash flow of many factories has come to a negative state.

From February this year, the government hiked gas price for industries up to 179%, for which it promised uninterrupted gas supply. Industry owners have been paying the increased price for gas, along with increased electricity prices, but are not getting the promised uninterrupted gas supply. In this situation, entrepreneurs fear that they will fall behind in competitiveness and some industrial factories may be forced to close down due to losses.

Meanwhile, data from Bangladesh Oil, Gas and Mineral Corporation, known as Petrobangla, shows there has been some improvement in gas production and it will further improve by this June. According to Petrobangla data, the country has a daily gas demand of 3,600 to 4,000 mmcf. Daily supply as of January this year was about 2,650 mmcf and it has now increased to 2,900 mmcf, which is still around 1,000 mmcf less than the demand. The government has said it will adjust fuel prices in the local market in line with price changes in the global market, which it has not done yet, leaving entrepreneurs dissatisfied. A new exploration of fossil fuel and shifting dependence on green fuel could support the sector sustainably, but we do have not enough preparedness.

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