News
New electricity tariff hike proposed, CPC to back CEB to avert losses
View(s):By Niranjala Ariyawansha
The Ceylon Electricity Board (CEB) has sought approval from the Public Utility Commission of
Sri Lanka (PUCSL) to increase electricity tariffs by 18.3 percent, with an assurance from the Ceylon Petroleum Corporation (CPC) that it would provide fuel at a lower cost than the market price to the CEB for electricity generation.
The Sunday Times learns that the CEB, after considering proposals to raise tariffs between 25 to 35 percent, had eventually settled on a lower rate following a government decision to seek and obtain the support of the CPC to provide fuel at a reduced rate for power generation.
The CPC has given an assurance that from May 15 onwards it will supply naphtha and HFO (heavy fuel oil) to the CEB at Rs 9 and Rs 10, respectively—less than the market prices.
A decision also has been taken to postpone by one year a payment due for the Uma Oya project, officials said.
The electricity tariff proposal prepared by the CEB for the second quarter this year has also been submitted to the Finance Ministry to be shared with the International Monetary Fund (IMF).
The PUCSL will hold public sittings on June 3 to seek views on the proposed tariffs, with the approval due later next month.
The CEB suffered a loss of Rs 18 billion in the first quarter after tariffs were reduced by 20 percent earlier this year. The losses have increased up to Rs 25 billion by May.
The tariff reduction by the PUCSL had resulted in a delay in the IMF programme. The Fund has now called for a cost-reflective pricing system.
Meanwhile, amid constant disagreement and allegations of unnecessary influence about the cost-reflective tariff, CEB Chairman Thilak Siyambalapitiya resigned from his post on May 9.
However, the Energy Ministry media officer last Sunday had claimed the CEB chairman had not resigned and daily newspapers rushed to print, stating that Dr. Siyambalapitiya had not resigned but only gone on leave. Dr. Siyambalapitiya is currently overseas.
The ministry has appointed Secretary Prof. Udayanga Hemapala as acting chairman.
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