A suspension of diesel supplies to the Ceylon Electricity Board (CEB) forcing power blackouts will become inevitable if outstanding dues are not settled, a Cabinet Minister warned yesterday.
“Even with the tariff revision in March the CEB has not paid up Rs. 3.3 billion in arrears to the Ceylon Petroleum Corporation (CPC),” Petroleum Minister A. H. M. Fowzie, told The Sunday Times.
But, the CEB is having difficulties despite the increase in tariff hikes, its Chairman Udayasiri Kariyawasam said. “Hence, we are now talking to the Treasury to resolve the matter,” he said.
However, he declared that the Treasury was not in a position to subsidize the CEB like in the past since the CEB was now buying diesel at a concessionary rate of Rs. 55 a litre.
Mr. Kariyawasam said the CEB had paid up Rs. 2.1 billion so far to the CPC between January and May 12 this year. There is further electricity tariff increase intended and we are evolving plans to improve revenue levels through cost cutting. We are also working on plans to reduce consumption of auto diesel which is more expensive than regular diesel.
The CEB increased tariffs by about 40 per cent in March in the hope of generating some Rs. 4.2 billion in revenue to settle its debts with the CPC. However, actual revenue earned has fallen short of CEB’s expectations. As a result of government concessions granted to various domestic and industrial sector consumers, the CEB has earned only Rs. 2.7 billion.
The CEB currently receives a monthly supply of about 40 million litres of diesel from the CPC, while producing about 65 percent of the country’s electricity requirements with the help of thermal power plants.
CPC chairman Ashantha de Mel said they were having discussions with the Treasury on the matter of monies owing to the CPC, and that a decision would be made soon. Mr. de Mel said the Treasury was not in a position to subsidize the CEB as it had in the past.
“Unfortunately for the CEB, both electricity tariffs and domestic fuel prices have gone up, so the CEB is not getting the expected revenue from the tariff hikes,” Mr. de Mel said.
However, according to CEB chairman Kariyawasam, the CEB has not been affected by the recent fuel price hikes. He said the CEB received diesel at a contractual price of Rs. 86 a litre.