ISSN: 1391 - 0531
Sunday March 2, 2008
Vol. 42 - No 40

Switch of policy

Electricty tariff hike only for big users

By Malik Gunatilleke

Electricity consumers using more than 90 units will have to bear the bulk of the increased charges due to come into effect by the middle of this month, following a government decision to provide concessions to low electricity consumers and the Treasury ruling out fuel subsidies to CEB.

Power and Energy Minister, John Seneviratne yesterday ruled out possibilities of the Treasury granting fuel subsidies to the Ceylon Electricity Board (CEB) even though the CEB would be granting concessions to those using less than 90 units following a directive from President Mahinda Rajapaksa.

The increases were due to come into effect yesterday, but have been put off by a further two weeks following widespread public protest and shock over the proposed 40 percent hike. A CEB official said the new tariff structure would provide concession to about 75 percent of households which generally used less than 90 units of electricity.

Following the government’s decision to revise the proposed electricity tariff hike this week, the CEB along with the Ministry of Power and Energy is recalculating the tariff increase to be imposed this month. Mr Seneviratne said that the tariff increase would be implemented on March 15 and that the CEB was also considering the possibility of providing some concessions to industries.

“The Treasury has decided to halt all subsidies because it believes that it is unfair to allow the taxpayers who do not consume electricity to subsidise fuel for those who do,” he said. With concessions said to be granted to 75% of the domestic consumers and the industrial Sector, most of the burden of the tariff hikes will fall on the domestic users who consume more than 90 units a month.

Minister Seneviratne said that because the calculation was not finalized it wasn’t clear as to how the CEB would make up its losses by taxing what is just one fourth of its domestic user market. Meanwhile, CEB General Manager Ranjith Pulleperuma said a special committee set up in the CEB would review all public proposals submitted February 29.

He said the CEB expected to seek approval for the tariff hike within two weeks so that implementation could take place immediately after that. Following the Treasury’s decision to stop subsidizing CPC fuel, the CEB was forced to purchase its fuel at the normal retail prices. This coupled with the fact that 65% of the country’s power was supplied through thermal power plants using diesel forced the CEB to push for an immediate tariff increase.

“The only alternative is to have long spread island-wide power cuts and the only way to avoid that was to increase tariffs,” the General Manager said.

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