News
CEB plans up to 35% tariff hike
View(s):- Chairman resigns reportedly due to political interference
By Niranjala Ariyawansha
An electricity tariff increase of 25 to 35 percent is among the proposals under consideration by Ceylon Electricity Board (CEB), as the International Monetary Fund (IMF) awaits the implementation of the revised rates.
CEB sources said these tariff proposals would be prepared in accordance with the formula agreed upon by the CEB and the Public Utilities Commission of Sri Lanka and submitted for PUCSL’s approval.
With the discussions on the revised tariffs underway, CEB Chairman Tilak Siyambalapitiya has submitted his resignation to the Minister of Energy. The Sunday Times learns that the resignation has been reportedly prompted by unnecessary interference of the political authority and the PUCSL regarding the cost-reflective tariff.
The PUCSL approved a 20 percent reduction in electricity tariffs in January this year, despite the CEB’s position that the tariff should continue at the then-current rate.
A senior CEB official said that after the January tariff reduction, the CEB started to incur losses again, as had been the case before 2022.
“In 2022, the CEB’s accumulated loss was Rs. 473 billion. In 2022, with the economic collapse, the then government, in keeping with IMF conditions, increased electricity tariffs on two occasions. As a result, CEB made a profit of Rs. 61 billion in 2023 and Rs. 141 billion in 2024. As a result, by the end of 2024, the CEB’s accumulated loss decreased to Rs. 271 billion. But now, again, since February this year, the CEB’s loss has been increasing from Rs. 271.1 billion,” he claimed.
The Rs. 473 billion accumulated loss included long-term loans and overdrafts from state banks, interest payments,
and payments owed to Ceylon Petroleum Corporation (CPC) and private power plants.
“The IMF had two main conditions regarding the country’s electricity tariffs. One was the cost-reflective tariff. The CEB had pushed for this. The other was that if the CEB’s cash flow in a given month is less than Rs. 15 billion, then an immediate 10% tariff increase should be made,” the senior official said.
He noted if the tariffs were not reduced by 20 percent in January this year, the tariff in the second quarter should have been increased by around 5 percent.
Twice in recent weeks the IMF reminded Sri Lanka that the cost-recovery electricity pricing structural benchmark had been breached and fiscal risks could increase.
Tariffs should have been revised by the Ceylon Electricity Board and the PUCSL in April on a quarterly schedule. But it was not done. Authorities took a roundabout way to explain why the April tariff revision was skipped.
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