Monday 29, May 2023

Gas shortage hits industrial sector

Time Digital News: The gas shortage is seriously affecting the country’s industries, including the export-oriented apparel and textile sectors, already struggling to cope with power cuts for a more than a week, besides the suspension of fertiliser production at two state-owned factories.

Leaders of the Bangladesh Knitwear Manufacturers and Exporters Association, the Bangladesh Textile Mills Association and apparel factories said that their productions dropped by 40–50 per cent due to the fall in gas supply.

They said that if the gas crisis was not addressed at the earliest, it would create an adverse impact on the country’s export-oriented apparel and textile industries.

The gas crisis has also forced two state-run fertiliser factories one in Chattogram and the other in Jamalpur to suspend productions.

BKMEA executive president Mohammad Hatem on July 26 told that the export-oriented knitwear sector’s production came down to 50 per cent mainly due to the gas crisis while the two-hour power cut could be manageable.

‘We have requested the government to ensure adequate gas supply for saving our export-oriented industry. If the government spends two to five billion [US] dollars from the forex reserve for a smooth gas supply to our industry, we will be able to give back 10–15 billion to the reserve in the coming days,’ he said, adding that such a move will lower the reserve now but will bring about greater benefits in the future.

He, however, went on to say that the buying orders to them also came down due to the global economic downturn, especially in European countries.

He said that if the gas crisis continued, the export-oriented industries would face a grave threat on the competitive markets.

Bangladesh earned USD52.8 billion from exports in the financial year 2021–22 in which the contribution of the apparel industries was USD42.61 billion 81.81 per cent of the total export income, according to Export Promotion Bureau data.

Abed Textile Processing Mills Limited director Abdullah Al Mamun, also vice-president of the BTMA, said that they had been suffering an acute gas crisis that reduced their production by 40–50 per cent.

‘The gas pressure sometimes just comes down to nil. The low pressure started after Eid-ul-Azha and the situation has been deteriorating for the past few days,’ he added.

BTMA vice-president Fazlul Hoque said that the production in some factories fell below 50 per cent due to the gas crisis as the government could not import liquefied natural gas.

‘We have already sent letters to the government in this regard, demanding an uninterrupted gas and power supply to the export-oriented industries. [But] the government said that it could not import LNG,’ he added.

He cautioned that if the production in the export-oriented factories was hampered the country’s economic wheels would slow down.

Readymade garments company Euro Denim and Fashion Limited director Zakir Hossain on Wednesday told that their production, too, dipped by about 50 per cent due to low gas pressure.

‘We have to close a dyeing factory in Narayanganj for not having gas,’ he added.

Another RMG firm Azim Group’s executive director Md Ahasanul Kader Zahed said on the day that they were forced to run factories using diesel instead of gas as their production of pound per square inch came down to two from 14 in recent days.

‘Our production cost has shot up to Tk 1 crore from Tk 40-45 lakh as we have to wash around 45,000 pieces of products a day, of which over 20,000 are denim items,’ the garment manufacturer said, adding that many factories cannot do so for not having diesel facility in boilers.

He said that their company owned three boilers and one of them could run on diesel.

He noted that the gas pressure remained low for six to eight hours daily.

At normal times, the industrial sector uses 18.02 per cent of the total gas consumed in the country while the power sector takes 58.29 per cent, commercial sector 0.48 per cent, consumption by CNG-run vehicles 3.45 per cent, fertiliser production 6.36 per cent, tea sector 0.10 per cent, domestic consumption 13.19 per cent and the small and medium enterprises sector only 0.11 per cent, according to the 2020–21 annual report of the Bangladesh Energy Regulatory Commission.

‘Since our industries are scattered over various cities, many of them cannot avoid power cuts,’ Federation of Bangladesh Chambers of Commerce and Industry senior vice-president Mostafa Azad Chowdhury said at a discussion organised by the Centre for Policy Dialogue on Sunday.

Power cuts outside the capital are three times the cuts in it, he said, warning that the production cost will go up for all sorts of industrial products, especially for apparel items, if the situation does not improve.

Chair of the Bangladesh Oil, Gas and Mineral Corporation, also known as Petrobangla, Nazmul Ahsan and managing director of the Titas Gas Transmission and Distribution Company Limited Md Haronur Rashid Mullah told New Age that they did not know about the gas crisis in the apparel and textile sectors as no representatives of the sectors informed them of the crisis.

BKMEA executive president Mohammad Hatem on July 26 night said, ‘We have requested the Petrobangla chairman, Titas managing director and other distributors verbally several times to address the issue. We also spoke with the Petrobangla chairman yesterday [July 2].’

They have also urged the State Minister for Power, Energy and Mineral Resources recently to address the issue, Mohammad Hatem said.

‘If such a gas crisis has occurred, they can directly talk to us. We will solve the issue. But I think that the gas supply might be hampered in a small number of areas,’ said the Petrobangla chair.

Asked about the LNG import, Nazmul replied, ‘We are not importing 200mmfcd LNG from the spot market as this procurement requires 5–6 times the prices than earlier.’

He said that the LNG prices per MMcfd increased to USD40 from USD6.

Titas managing director Haronur Rashid said that they reduced gas supply to the industries at a minimum level and maximum in the power sector.

‘We have now a shortage of about 300MMcfd gas supply per day,’ he said.

The government has announced a maximum of two hours of area-based power outage a day for a week from July 19 in an attempt to tackle the problem of severe energy shortage.

The state-owned urea producing enterprise Jamuna Fertiliser Company Limited in Jamaplpur has suspended its production since the first day of July due to shortage of gas supply, according to a company production report.

JFCL general manager (Operations) and head of its Ammonia Department Md Abdul Hakim on Saturday said, ‘Due to the shortage of gas supply, we have been forced to suspend the production of urea since July 1. We will resume production after we get an uninterrupted gas supply.’

According to JFCL website information, the company produced nearly 900 tonnes of urea a day and thus the company has failed to produce some 26,830 tonnes of the fertiliser in the past 30 days.

Earlier, the Chittagong Urea Fertiliser Ltd was compelled to halt its production from July 19 due to the gas crisis.

The company produced 1,000 tonnes of ammonia and 1,200 tonnes of urea each day.

Agricultural economist Jahangir Alam told on Saturday that the country’s urea production might nosedive to 20 per cent due to the gas crisis.

‘Usually, we locally produced less than 50 per cent of our urea demand and we depended on imports to meet the rest of the demand, he said.

Amid the recent global inflation, he said, the dependence on urea import has also pushed up the cost of agricultural production.

Bangladesh Agricultural Research Institute’s senior scientific officer Nazim Uddin suggested using organic fertilisers instead of urea.

He said that the urea production crisis might not affect the upcoming aus cultivation in the rainy season.

But, he added, if the crisis drags on the overall crop production will be affected as urea is used in almost every crop production.

He said, ‘Our annual urea fertiliser demand is about 55 lakh tonnes and we have to depend on imports to meet half the demand.’


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