Govt. may continue CEB fuel subsidy to avert tariff hike

By Malik Gunatilleke

The government is likely to continue its fuel subsidy to the cash-strapped Ceylon Electricity Board in a bid to avert an imminent tariff hike. Officials from the Finance Ministry, the Ceylon Petroleum Corporation (CPC) and the CEB would hold talks next week to discuss the fuel subsidy, CEB chairman Udayasiri Kariyawasam said. He said the CEB lost just over Rs. 4 for every unit of electricity consumed and depended heavily on the fuel subsidy.

CEB General Manager D.R. Pulleperuma said 65% of Sri Lanka’s energy was generated through thermal power and the CEB was receiving diesel for power plants at Rs. 30 though the market price was about Rs. 50. He said the subsidy had to be continued if the tariff hike was to be averted.

The President of the CEB Joint Front of Trade Unions, Ananda Nimalaratne, said the CEB had always requested the government for an increase in electricity tariffs to cushion the huge losses but no proposals had been put forward to the government as yet.

Meanwhile, CPC Chairman Ashantha De Mel said there would not be a major price revision next month when the tax on petrol was reduced from 15 percent to five percent in keeping with a budget proposal.“Currently the world market price for a barrel of crude oil is around US$ 90. The tax reduction would mean the petrol price may come down by Rs. 6, but no price revision has been planned,” he said.