Doing business is becoming more difficult due to gas and electricity shortages

Insufficient supply of gas and electricity, rising fuel prices and inflation have driven up production costs in Bangladesh, making it difficult to do business here, top business leaders said at a discussion yesterday.

Although the industrial sector pays the highest utility rates, it meets less than half of its gas demand.

The energy sector was one of the pillars of criminalization by the previous government, Trade Adviser Sheikh Bashir Uddin said at a discussion on ‘Ways to mitigate energy crisis in industrial sectors’ organized by the Bangladesh Chamber of Industry (BCI).

“I had to stand in the rain in front of the residence of former Minister of State for Power, Power and Mineral Resources (Nasrul Hamid) to get gasification to my industry at my own expense,” said Bashir, the company’s managing director. AkijBashir Group, which has enterprises for the production of ceramics, glass, steel and polymers.

Moreover, Bashir said that he had to pay a bribe of TUR 20 crore to the traffic authorities for excavating the road for laying the 40 km gas pipeline.

“That won’t happen now. This is an opportunity for you (business leaders). Come to us with business proposals and solutions, not just problems – we will deal with them together,” he added.

“I had to pay a bribe of Rs 20 crore to the road authorities for digging up the road for laying a 40-km gas pipeline.”

— Sheikh Bashir Uddin, Trade Advisor

About 200 factories went out of business in the first nine months of the year, and another 300 factories are set to close next year, BCI President Anwar-Ul-Alam Chowdhury said.

Industry was established in Bangladesh based on the availability of local gas and a fast-learning workforce.

“Besides that, everything else is expensive here – land, infrastructure, development, cost of bank financing and quick money. But now we have learned that we do not have gas or the prices are very high. Uncertain situation. appeared.”

Chowdhury further blamed the situation on foreign exchange devaluation, liquidity crunch in the banking sector, decline in liquefied natural gas imports, restrictions on issuing letters of credit and lack of proper governance at the National Board of Revenue.

The industries’ gas requirement is around 1,040 million cubic feet per day (MMcfd) and they are getting around 500 million cubic feet per day, said Ijaz Hossain, former dean of the Faculty of Engineering, Bangladesh University of Engineering and Technology (BUET), in his program report.

“It is very alarming that energy consumption has not increased in the last two years.”

According to him, due to the expansion of the power grid, energy consumption in the domestic sector has increased, which means a reduction in the industrial sector.

Due to high energy prices and supply disruptions, the cost of production becomes higher, causing inflation, causing industries to default and go out of business, Hossain added.

According to Shamsuzaman, vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association, electricity goes out four to five times a day.

“There are huge illegal connections in industrial areas, but distribution companies have failed to control them,” he said.

The government once encouraged the construction of factories, but now they are closing, said Sk Masadul Alam Masud of the Bangladesh Steel Association.

Syed Naseem Manzoor, president of the Bangladesh Leather Products and Footwear Manufacturers and Exporters Association, said they were unable to operate the gas generator at the Savar tannery.

“Systemic losses in the gas sector are nothing more than theft. There should be exemplary punishment for those involved in theft,” he said.

According to Fuzul Kabir Khan, adviser to the Ministry of Power, Energy and Mineral Resources, it was common practice to force public works department officials to deal with ministers or pay bribes to officials.

“As a result, money was invested in unnecessary projects. This is a waste of money,” he said, adding that this will not happen under the interim government.

Khan said they had taken measures to reduce energy costs, including onshore and offshore drilling programs to increase supply.

Gas supplies will remain the same until February next year and will increase from March, Petrobangla Chairman Zanendra Nath Sarker said.

“The senior leadership of the previous government forced me to increase gas supplies to the energy sector, and not to industry. But the industrial sector pays us the highest price. This will not happen in the next few days.”

He demanded that the planning department speedily approve proposals for gas industry development projects to increase gas supplies from local gas fields.

Gas should be supplied proportionally to all sectors, said Rezaul Karim, chairman of the Bangladesh Energy Development Board.