Sri Lanka hikes electricity rates by 264 percent amid economic crisis, first in 9 years

Amid the economic turmoil, Sri Lanka's state-run electricity board has decided to increase its monthly charges by 264 percent. On Tuesday, the Public Utilities Commission of Sri Lanka (PUCSL) announced that the new rates will be effective from Wednesday, August 10, 2022. According to the Economy Next report, different price plans will be applicable to different numbers of consumed units, said PUCSL Chairman Janaka Ratnayake.

Notably, this is the first time in nine years that the Ceylon Electricity Board (CEB), which is currently facing massive losses of $616 million, has announced a hike in electricity prices. And, this move was approved by PUCSL at CEB's request. However, several other conditions have been imposed on the electricity board, including opening a bulk supply transaction account and conducting an independent dispatch audit for the last year. Also, CEB has been asked to renew and revise purchase and sales agreements and to make payments of interest for security deposits obtained from customers.

Those whose income is above 60pc in forex will have to pay electricity bills in dollars

The PUCSL Chairman announced that the CEB now holds the right to increase rates by 264 percent for consumers who use fewer than 30 units and 211 percent for consumers using between 30 and 60 units, while 125 percent can be charged to consumers using between 60 to 90 units. With this, the monthly electricity charges will go up by an average of 75 percent. Meanwhile, the CEB has also been instructed not to provide any bonuses for CEB staff until finances become stabilized. Retail consumers with solar rooftops under the Net Metering and Net Accounting schemes will be charged a monthly fixed amount, directed by PUCSL to the Electricity Board.

According to Economy Next, PUCSL Chairman announced that the new tariffs were prepared using the least expensive method. Those people whose income is above 60 percent in forex will have to pay electricity bills in dollars, and consumers who fall under the said category will also get a discount of 1.5 percent. Ratnayake said the electricity bills have been increased owing to the hike in global prices and the war situation.

"With the rising global prices and the war situation, we need to increase tariffs because we produce a lot of electricity by burning fuel," Ratnayake added, saying that local electricity suppliers have to be paid 20 billion rupees. "Power cuts are going on, the dollar has gone up, we are getting oil at high prices without a proper plan... so we cannot justify [raising prices as CEB had earlier proposed]," he said.

Image: AP