Fuel shortage hurts Chattogram industries
The fuel crunch, which began in early March following heightened tensions in the Middle East, has been exacerbated by panic buying, pushing demand to nearly double its usual level
Highlights:
- Diesel shortage reduces industrial output, increases production costs
- BSRM receives less than half required daily diesel supply
- Fuel shortages force factories to scale back or halt operations
- Shipbreaking and heavy industries face severe operational disruptions
- Garment sector struggles due to load shedding and limited diesel
- Government denies shortage, blames panic buying for pressure
A tightening diesel supply has begun to disrupt operations across key industrial sectors, with manufacturers in Chattogram reporting reduced output and rising costs amid an ongoing fuel crunch.
Leading steelmaker BSRM Group, which operates six factories in the port city, requires around 35,000 litres of diesel daily to run heavy equipment and maintain production.
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However, company officials say they have been receiving between 18,000 and 27,000 litres from state-run fuel marketing companies in recent weeks.
The shortfall has forced the company to scale back operations.
"Fuel supply is very crucial for heavy industries like steel mills, as most equipment runs on diesel. We are not receiving even half of our required quantity, which is disrupting our operations," Tapan Sen Gupta, deputy managing director of BSRM Group, told The Business Standard.
He warned that prolonged supply constraints could push up production costs further, compounding price pressures already triggered by the Middle East conflict.
"The situation has already forced us to increase product prices. If the crisis continues, it will put additional pressure on the construction sector," he added.
Wider industrial impact
BSRM is not alone. Industries dependent on fuel oil to operate heavy machinery – such as cranes, forklifts, generators and excavators – are facing similar challenges.
At Arab Ship Recycling Limited, a green shipbreaking yard in Sitakunda, operations have slowed significantly due to fuel shortages. The yard relies on high-capacity cranes and winch machines, which consume large volumes of diesel daily.
Nur Uddin Rubel, chairman of the company, said they had invested over Tk70 crore to modernise the yard in line with international environmental standards.
"We need around 18,000 litres of diesel a month, but in March we received only 9,000 litres – half of our requirement. If the supply does not improve within a couple of days, we may have to suspend operations, which will lead to significant losses," he said.
The fuel crunch, which began in early March following heightened tensions in the Middle East, has been exacerbated by panic buying, pushing demand to nearly double its usual level.
In response, the government introduced rationing measures, further tightening supply in some sectors.
RMG sector under pressure
The country's top export-earning ready-made garment sector is also feeling the strain, particularly as rising temperatures trigger increased load shedding.
Factories typically rely on diesel-powered generators to maintain production during power outages. However, industry leaders say limited fuel supply is forcing many units to halt operations during these periods.
"Garment factories operate on tight deadlines where every minute counts," said AM Mahbub Chowdhury, senior vice president of the Chattogram Metropolitan Chamber of Commerce and Industry and a senior member of the Bangladesh Garment Manufacturers and Exporters Association.
"If factories cannot operate during load shedding, workers have to put in extra hours to meet shipment schedules. This raises costs in a highly competitive global market where Bangladesh is already losing orders to competitors," he added.
According to him, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has written to the government seeking uninterrupted fuel and power supply, but has yet to receive a response.
"If the situation persists, the sector – already under pressure due to the Middle East conflict – could face serious risks," he warned.
Authorities deny shortage
Despite complaints from industry players, officials of state-run fuel companies insist that supply remains adequate.
Mofizur Rahman, managing director of Padma Oil Company, said distribution is being carried out based on clients' previous consumption patterns.
"We are supplying fuel in line with clients' weekly and monthly requirements, based on their purchase records from March last year. So, the allegation of insufficient supply is not accurate," he said.
Officials at Bangladesh Petroleum Corporation (BPC), the state-owned importer and distributor of fuel, echoed similar claims.
Jahangir Kabir, general manager (finance) of BPC, said a total of 176,202 tonnes of diesel had already arrived in the country this month, with two more shipments carrying around 54,000 tonnes on the way.
In addition, 20,000 tonnes of diesel have been imported from India via pipeline, with another 7,000 tonnes expected this week.
"We have sufficient stock to meet demand for at least three weeks. More shipments are scheduled as we continue to source fuel from multiple suppliers," he said.
He also urged consumers to avoid panic buying, which he said is contributing to distribution pressures.
