The public group, which has a monopoly on Sri Lanka’s electricity supply and is heavily in the red, wants to increase its tariffs by more than 800%, to the detriment of the poorest.
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The country, plagued by the worst economic crisis since independence in 1948, lacks the dollars to import the fuel needed to generate electricity.
In this crisis context, the CEB (Ceylon Electricity Board), the only state-controlled electricity company in Sri Lanka, which posted a loss of 65 billion rupees ($185 million) in the first quarter, claimed an 835% increase in subsidized tariffs for the poorest households, the Public Utilities Commission of Sri Lanka (PUCSL) said on Monday.
The pricing system in place to date allows a household consuming less than 30 kilowatts per month to benefit from a flat rate of Rs.54.27 ($0.15), which the CEB has now reduced to Rs.507.65 ($1.44 ) wants to raise.
For PUCSL President Janaka Ratnayake, “the majority of consumers will not be able to cope with such an increase”. “Therefore, we propose a direct subsidy from the Treasury to reduce the increase requested by the CEB by more than half,” he told the Colombo press.
The government has not yet decided on the tariffs that will apply to individuals, but those for trade and industry will increase by 43 to 61 percent, he said. The CEB will also be able to rely on the contribution of users who have dollars, such as export companies, to finance the import of oil and spare parts.
Since the beginning of the year, diesel prices have more than quadrupled and petrol prices have more than doubled in Sri Lanka, where these two fuels are in short supply. Energy Minister Kanchana Wijesekera said he could not give a timetable for the next deliveries to a country that is completely dependent on foreign countries for its oil supply.
After apologizing to motorists on Sunday, the minister announced that two of his colleagues were on their way to Moscow to negotiate lower fuel prices. Mr Wijesekera himself traveled to Qatar to also negotiate a price cut for hydrocarbons shipped to Sri Lanka.
On Monday, the government was forced to announce the suspension of all fuel sales for two weeks from midnight Monday night, except for key sectors such as healthcare.
A decision aimed at “conserving the small reserves of fuel that we still have,” said government spokesman Bandula Gunawardana, once again apologizing to consumers.
Sri Lanka was unable to repay about $51 billion in external debt and in April invoked default to open negotiations with the International Monetary Fund (IMF).
A delegation from the US Treasury and State Departments arrived in the country to “explore the most effective ways for the United States to assist Sri Lankans in need,” the US Embassy in Colombo said.
The United Nations warned on June 10 that Sri Lanka’s unprecedented economic crisis could turn into a serious humanitarian crisis with millions already in need of assistance.