Key facts
- Bangladesh is experiencing blackouts and factory shutdowns due to LNG import disruptions.
- 55% of surveyed knitwear factories in Bangladesh had buyers cancel or cut orders due to energy shortages.
- Pakistan has introduced a fuel subsidy program for motorcycle, rickshaw, and small-car owners.
- Asian spot LNG prices have surged toward $30 per million British thermal units.
- Shell estimates 36 million tons of LNG have been lost from the Middle East this year.
- Poultry farmer Sayedul Islam in Bangladesh is losing 15-20 birds daily due to power outages.
Energy disruptions stemming from geopolitical tensions in the Middle East are severely impacting Bangladesh and Pakistan, leading to widespread shortages and economic strain. Attacks on Iran and ongoing conflict involving Houthi rebels have disrupted critical oil and gas export routes, driving up Asian spot LNG prices significantly.
In Bangladesh, the country is experiencing blackouts and factory shutdowns as it struggles to secure LNG imports, with prices on the spot market soaring. This has led to a slowdown in industrial growth and production, particularly affecting the garments industry, the nation's largest export sector. Many factories have seen orders canceled or reduced, and some have resorted to costly air freight to meet deadlines, while others face additional expenses to keep operations running on diesel. Even essential services like hospitals are affected by frequent power cuts, with generators not always sufficient for ward ventilation.
Pakistan is experiencing a similar strain on its power grid, though less severe than Bangladesh. The country faces a significant gas deficit for the upcoming winter. The government has implemented a fuel subsidy program to mitigate the impact of sharply rising transport fuel prices, but registration issues and the subsidy's limitations are causing frustration among citizens, particularly those with lower incomes. Business leaders and workers report a significant hit to their earnings, making basic necessities unaffordable.