Sri Lankan power company aims to increase prices by 835%

Sri Lanka’s deep-deficit state electricity monopoly has demanded a shocking price hike of over 800 percent for its poorest customers as the bankrupt nation runs out of fuel, regulators said on Monday.

The South Asian nation was hit by a foreign exchange crisis, leaving it woefully short of dollars for imports, including fuel for power generation and transportation.

The Ceylon Electricity Board (CEB) lost 65 billion rupees ($185 million) in the first quarter and called for an 835 percent price hike for the heavily subsidized smallest electricity consumers, the Public Utilities Commission of Sri Lanka (PUCSL) said.

Currently, anyone using less than 30 kilowatts a month pays a flat rate of Rs.54.27 ($0.15), which the CEB wanted to increase to Rs.507.65 ($1.44).

“A majority of domestic consumers will not be able to afford that kind of steep increase,” PUCSL Chairman Janaka Ratnayake told reporters in Colombo.

“So we proposed a direct subsidy from the Treasury Department to limit the increase to less than half of what they asked for.”

Domestic tariffs have yet to be determined, but rates for commercial and industrial users will increase by 43 to 61 percent, he added.

The CEB will also be authorized to charge users who earn foreign exchange, such as exporters, in dollars, he added, to help the generator fund imports of oil and spare parts.

The government imposed 13-hour blackouts a few months ago, but power outages have been reduced to about four hours a day as rain fills hydroelectric reservoirs.

In the past six months, the government has already nearly quadrupled diesel prices and increased gasoline prices by more than two and a half times.

Sri Lanka remains practically without diesel and petrol. The energy secretary said he couldn’t say when new supplies will arrive in the country, which doesn’t have its own oil.

Kanchana Vijesekera apologized to motorists on Sunday and announced two ministers would travel to Moscow to secure cheaper Russian oil.

Wijesekera himself went to Qatar to negotiate preferential terms for hydrocarbon imports.

Meanwhile, a delegation from the US Treasury and State Departments opened talks with Prime Minister Ranil Wickremesinghe, his office said.

“The United States has agreed to provide technical assistance for financial management in Sri Lanka,” the prime minister’s office said in a brief statement.

The government failed to repay its $51 billion in foreign debt, declared default in April and is negotiating a possible bailout with the International Monetary Fund.