High tension electrical shock for consumers next year
Sri Lanka’s state-run Ceylon Electricity Board (CEB) will introduce another tariff hike by 30 per cent in January and another 40 per cent in July in 2023, in a series of shocking power price hikes.
The aim is to cut losses amid high fuel costs in accordance with the cost reflective price formula enforced in August 2022, Energy Ministry sources said.
Cabinet approval has been sought for six monthly price revisions formulated by using the formula next year as well, a Ministry memorandum submitted for Treasury observation revealed.
The CEB has submitted a revenue requirement of Rs. 505 billion excluding Lanka Electric Company (LECO) costs, requiring an 82.4 per cent increase in revenue to cover costs this year.
The approved tariff hikes were expected to raise Rs. 500 billion in revenue, including LECO sales, which is only a 75-per cent increase of profit, compared to the needed 82.4 per cent.
A 75 per cent tariff hike granted by the Public Utilities Commission in August 2022 and implemented with effect from October 2022 was not enough to cover costs, and the CEB is still making losses, the report said.
The profit of CEB in October 2022 was Rs. 2.84 billion with expenditure at Rs.32.98 billion and revenue at Rs. 35.82 billion. This was mainly due to the higher increase in electricity tariff, Finance Ministry data shows.
Under this situation there was no need to increase electricity tariff by 30 to 40 per cent next year further burdening the people who are already paying an unbearable price for electricity, a national council sub – committee report suggested
The CEB has no right to announce the electricity tariff hike in advance as it cannot predict the actual cost beforehand due to international fuel price fluctuations, several power and energy experts who contributed to the report said.
The increased electricity tariffs attempt to cover the losses made due to years of selling at subsidised rates, inefficient operations and economic crisis, Power and Energy Minister Kanchana Wijesekara said adding that a new tariff scheme has been introduced for low income households.
Chairman of the National Council sub-committee on identifying short- and medium-term programmes related to economic stabilisation, MP Patali Champika Ranawake, an electrical engineer by profession who also served as the former power and energy minister, told the Business Times that the CEB’s submission on reasons behind the tariff hike and costs incurred by them cannot be accepted.
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