Wazzup Pilipinas!?
Nine years ago, a pivotal decision was inked in Dhaka. Faced with dwindling domestic gas reserves and a surging appetite for power, Bangladesh peered into the global energy market and made a fateful pivot: it would embrace Liquefied Natural Gas (LNG). It was sold as a modern remedy, a sleek lifeline to keep the economic engine—powering everything from humming fertilizer plants to the iconic ready-made garment (RMG) factories—roaring forward.
Today, that lifeline has tightened into a chokehold.
Nearly a decade into its LNG era, this South Asian nation of 170 million people finds itself trapped in an agonizing paradox. The very fuel imported to sustain growth has devolved into an economic predator, bleeding foreign exchange reserves, triggering unprecedented price hikes, and forcing hundreds of factories to permanently lock their doors.
A Paradise Lost: From Self-Sufficiency to Fiscal Bleeding
For years, Bangladesh enjoyed an enviable economic advantage. Resting atop rich domestic natural gas fields, the country’s energy landscape was characterized by stability and affordability. This homegrown abundance gave birth to the nation’s powerhouse textile and apparel sector, allowing local manufacturers to fiercely outcompete regional rivals on the global stage.
The illusion shattered in April 2018 when the country waded into the volatile, unpredictable waters of the international LNG market.
What followed was a staggering inflationary spiral. Industrial gas prices skyrocketed by an astronomical 415% over the span of eight years. A unit of gas that cost a modest $0.063 (Tk7.76) in 2018 surged to a punishing $0.32 (Tk40) following a brutal succession of seven tariff hikes. In 2023 alone, consumers absorbed a single-year shock of up to 179%.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), starkly illustrates the human and operational toll:
“If a factory with a 50-tonne dyeing capacity paid $81,236 (Tk1 crore) per month for primary energy in 2018, it now has to pay $0.32 million (Tk4 crore) each month because of the higher gas price.”
The math became impossible. Trapped between exorbitant domestic energy bills and international buyers refusing to pay a cent more for garments, profit margins evaporated overnight. Companies unable to pay their bills faced sudden utility disconnections, sealing their fate.
The Anatomy of Industrial Collapse
In Gazipur, the pounding heart of Bangladesh’s manufacturing landscape, the silence of abandoned factories tells the true story of the LNG crisis.
On June 22, 2026, Unique Washing & Dyeing Ltd and Unique Designers Ltd announced their permanent closure after 36 years of operation. They are far from alone. Driven by crushing energy costs, shrinking work orders, and plummeting global buyer offers, more than 450 textile and apparel companies have collapsed over the past two years. BTMA President Showkat Aziz Russell grimly noted that 234 textile factories have shuttered since 2019 alone—including five of his own.
Worse still, even when manufacturers pay the extortionate tariffs, the gas doesn't always flow. Plagued by unreliable supply, desperate factory owners are routinely forced to burn expensive diesel or furnace oil just to meet strict export deadlines, pushing them deeper into the red.
Beyond factory floors, the ripple effects tear through the entire populace. Domestic consumers who once paid $6.50 (Tk800) a month for cooking gas now fork over $8.77 (Tk1,080), while power plants and fertilizer producers struggle under the weight of escalating input costs.
Bleeding Billions: A Macroeconomic Quagmire
At a national level, the obsession with LNG has transformed into a financial drain of historic proportions.
Bangladesh currently relies on LNG to satisfy roughly 30% of its daily gas requirements. But that fraction comes at an exorbitant price. In the 2024–25 fiscal year, the nation burned through $4.38 billion (Tk53,946 crore) solely for LNG imports and regasification facilities. In stark contrast, the remaining 70%—sourced from humble domestic fields—cost a mere $565 million (Tk6,956 crore).
To keep the taps open, the government has repeatedly turned to the fiscal safety valve, subsidizing the gaping chasm between actual import costs and retail tariffs. Subsidies ballooned from $486 million to $721 million, and scaled an estimated $1.34 billion for the 2025–26 fiscal year alone, heavily aggravated by geopolitical fallout in the Middle East that forced reliance on brutal spot-market purchases.
Before 2018, Bangladesh’s gas sector was entirely self-sufficient and famously free of government subsidies. Today, it stands as a monument to policy miscalculation, having swallowed Tk51,366 crore in public subsidies in just eight years.
Seeking Salvation in the Sun and Soil
With the old model broken, industry leaders and energy experts are sounding a unified call for radical reinvention. The way forward, they argue, demands turning away from imported fossil fuels and pivoting toward domestic exploration and aggressive renewable expansion.
Industrialists are already voting with their feet. Across the country, factories have rapidly embraced rooftop solar, installing over 500MW of capacity with another 500MW currently under implementation.
Pioneers like Pacific Jeans—a leading premium apparel manufacturer—installed a 7MW rooftop solar system four years ago to buffer against grid instability and erratic gas supplies. Solar now covers roughly 12% of their total electricity needs, offering vital relief on monthly utility outlays.
The financial logic is undeniable. According to Shafiqul Alam, Lead Energy Analyst for Bangladesh at the Institute for Energy Economics and Financial Analysis (IEEFA), industries paying $0.094 (Tk11.56) per unit for grid electricity during daytime off-peak hours—or equivalent sums via gas captive plants—can generate power through a CAPEX rooftop solar model for a mere $0.037 (Tk4.50) per unit. With an estimated industrial rooftop potential of 4,000MW to 5,000MW, the savings are astronomical.
M Zakir Hossain Khan, Chief Executive of the Change Initiative, emphasizes that true energy security lies in inexhaustible resources:
“The ongoing crisis in the Strait of Hormuz will not be the world’s last disruption in upstream energy supply... But solar and wind energy will always be available as long as the Earth exists. With the implementation of rooftop solar, factory owners can reduce their energy costs by 40% to 60%.”
A Crossroads for the Nation
Bangladesh stands at a historic crossroads. The grand experiment of relying on liquefied natural gas to fuel its ascent has proven to be an expensive, debilitating trap—one that drains foreign reserves, subsidizes foreign market volatility, and starves its most vital export engines.
If the country is to preserve its industrial base, protect millions of jobs, and reclaim its economic sovereignty, it must heed the hard lessons of the past decade. The path to resilience does not lie across treacherous seas in LNG tankers, but right above factory roofs in the unyielding tropical sun, and deep beneath its own soil waiting to be unlocked.
Ross is known as the Pambansang Blogger ng Pilipinas - An Information and Communication Technology (ICT) Professional by profession and a Social Media Evangelist by heart.
Post a Comment