Bangladesh’s industrial sector is facing mounting pressure as rising fuel prices and persistent load-shedding disrupt production, increase logistics costs and threaten overall competitiveness.
Over the past month, intensified power outages have forced factories to rely heavily on diesel-powered generators to maintain operations. However, the recent fuel price hike has significantly increased the cost of running these backup systems, adding to the financial strain on manufacturers.
According to the Energy and Mineral Resources Division, fuel prices were raised by Tk 15 to Tk 20 per litre, pushing diesel to a record Tk 115 per litre. Octane, petrol and kerosene prices also saw sharp increases, reflecting global market volatility.
Industry insiders say the immediate impact has been a spike in transportation costs, with truck fares rising sharply for both raw materials and finished goods. This has further compounded production expenses across sectors, including textiles, steel and consumer goods.
Manufacturers warn that while costs are rising, weak market demand is limiting their ability to pass on price increases to buyers, squeezing profit margins. Several factory owners indicated that without stable fuel supply, the situation could deteriorate further, potentially leading to operational losses.
The crisis is particularly acute in the ready-made garments (RMG) sector, which accounts for over 80% of Bangladesh’s export earnings. According to Mohammad Hatem, production in many garment factories has dropped by 20–25% due to power outages and diesel shortages.
Similarly, industries such as steel are also feeling the impact. Mohammad Jahangir Alam noted that fuel price hikes could push up rod and cement prices, even as demand remains subdued.
The energy crisis has been exacerbated by global geopolitical tensions, particularly disruptions in oil supply routes such as the Strait of Hormuz, which have driven crude oil prices above $100 per barrel. In response, the government has introduced fuel rationing measures, further limiting access for industrial users.
Factory-level impacts are already visible. Many units are operating below capacity due to insufficient fuel supply, with some reporting utilisation levels dropping to as low as 50%. Even where generators are used, production efficiency has declined due to inconsistent fuel availability.
Looking ahead, concerns are also growing over potential increases in electricity tariffs and gas prices, particularly as global LNG prices continue to rise. Industry stakeholders say this could trigger another wave of cost escalation in the near term.
Business leaders are urging policymakers to ensure stable fuel supply and introduce supportive measures to help industries navigate the ongoing crisis. Without timely intervention, they warn, the combined impact of energy shortages and rising costs could weaken Bangladesh’s industrial output and export performance.
