Additional Coverage:
Energy Crisis Deepens Struggles for Bangladesh’s Workers and Economy
Dhaka, Bangladesh – Tariqul Islam, a 53-year-old father of four, has faced mounting challenges ever since setbacks in his clothing business about 18 months ago forced him to switch careers. Now relying on ride-sharing via his motorbike, Tariqul finds himself trapped in long queues for fuel amid disruptions linked to the ongoing war in Iran-disruptions that have spread far beyond the region and deeply affected Bangladesh.
“I used to manage fairly well with ride-sharing,” Tariqul explained. “But since the fuel shortages began, I can only run the bike for two days with fuel bought on one day.
That means sitting idle for a day and losing income.” Supporting a daughter at university and a son in college, these setbacks have made providing for his family in Dhaka increasingly difficult.
Tariqul’s plight reflects wider struggles across Bangladesh, a country heavily dependent on imported fuel. The energy crunch has led to daily disruptions, slowed industrial production, and raised alarms about the country’s economic growth. Although recent government efforts to boost fuel supply have slightly eased queues at gas stations, concerns remain acute.
Across Asia, many countries grapple with similar pressures as the war-driven surge in energy prices rattles economies reliant on imported oil and gas. Much of this fuel passes through the strategic Strait of Hormuz, a vital artery for about 20% of global oil and natural gas trade.
Rising fuel costs have triggered inflation and squeezed household budgets, while industries-from manufacturing to transportation-face higher operating expenses and supply chain disruptions. The Asian Development Bank recently downgraded growth forecasts for developing Asia and the Pacific, projecting a 4.7% growth rate in 2026 amid rising inflation and tighter financial conditions.
“If this situation continues, we will have to move back to our village and find another way to earn a living,” Tariqul said, underscoring the uncertainty facing many families. “It’s not possible to survive in Dhaka on ride-sharing alone under these conditions.”
Economic Ripple Effects and Government Responses
The rising energy costs are also straining Bangladesh’s public finances. If global prices remain elevated, the government is expected to spend an additional $1.07 billion on LNG subsidies in just the April-June quarter. To alleviate pressure, Bangladesh has sought fuel supplies from neighboring India, which has diversified its sources, including imports from Russia.
Authorities have implemented austerity measures such as shutting fertilizer factories to free up gas for power plants, rationing fuel, and limiting shopping mall hours. Power cuts have become more frequent in industrial areas, further hampering productivity.
The World Bank projects Bangladesh’s growth slowing to 3.9% in the fiscal year ending June 2026. It warned that a prolonged Middle East conflict could drive inflation higher, widen the current account deficit, and increase the burden of energy subsidies on public finances.
Jean Pesme, division director for Bangladesh and Bhutan at the World Bank, highlighted existing vulnerabilities in the economy, particularly related to employment and fiscal challenges. He cautioned against sharp fuel price increases, which could disproportionately impact farmers and the agriculture sector.
Garment Industry Faces Rising Costs and Export Setbacks
Bangladesh’s garment sector, a key pillar of its economy, is also feeling the pinch. Anwar-Ul Alam Chowdhury, president of the Bangladesh Chamber of Industries, warned that exports to Europe and the U.S. have fallen between 5% and 13% in recent months, partly due to the energy crisis. He fears that prolonged disruptions could erode buyer confidence and enable competitors like India, Vietnam, and Cambodia to gain market share.
Factory output has reportedly dropped 30% to 40%, while business costs have surged by 35% to 40% since the onset of heightened tensions in the Middle East. The garment sector employs around 4 million workers, mainly women from rural communities, and generates roughly $39 billion in annual exports, making it vital to the country’s economic health.
Alvi Islam, director of Arrival Fashion Limited, noted that manufacturers face increased expenses for petroleum-based materials like sewing threads and packaging, as well as the costs of running diesel generators during frequent power outages. His company now relies on generators for about four hours daily, pushing up production expenses significantly.
Workers’ Livelihoods at Risk
For garment workers like Mosammet Runa, 35, the future is fraught with uncertainty. Earning roughly $400 a month alongside her husband to support a family of six, she worries that ongoing conflict and economic pressures could cost many their jobs.
“Millions like us depend on this industry to survive,” Runa said. “If the war continues, livelihoods will be lost.
We are innocent people. The world should not make us victims.”
As Bangladesh navigates this energy crisis, the hope remains for a swift resolution to the conflict driving these disruptions-so families like Tariqul’s and millions of workers across the country can regain stability and sustain their livelihoods.