Bangladesh garment industry faces energy crisis and rising fuel costs

Energy shortages in Bangladesh are significantly impacting the nation’s garment industry, the world’s second-largest exporter. A survey of 134 knitwear factories revealed that 55% of respondents have experienced canceled or reduced orders due to gas and power shortages since late August, while 78% have partially halted production. These disruptions have led to shipment delays and discounted orders.

The crisis has been exacerbated by the Middle East conflict, which has driven up global prices for natural gas, furnace oil, and diesel. In response to soaring costs and shipping expenses, the Bangladeshi government recently raised fuel prices by up to 17.4%.

While most manufacturers are struggling, 4A Yarn Dyeing—a supplier to major brands including Walmart, Gap, and Next—has maintained uninterrupted operations by utilizing diversified energy sources. The company meets approximately 40% of its electricity needs through solar power, supplemented by its own gas and diesel generation. Despite this resilience, the company reported that costlier diesel has increased production costs by 2% to 3%, adding roughly 5 million taka to its monthly fuel expenses.