Sri Lanka's public utilities commission has approved a third increase in electricity tariffs this year, with hikes ranging from 6% to 18% across different consumer categories. The decision, announced on Friday, comes amid ongoing economic challenges and rising generation costs.
Details of the Tariff Hike
The Ceylon Electricity Board (CEB) requested the revision to cover increased fuel and maintenance expenses. Under the new rates, residential consumers will see a 6% rise, while industrial and commercial users face an 18% increase. The changes take effect from November 1, 2024.
Impact on Consumers
Households using less than 30 units per month will be exempt from the hike, protecting low-income groups. However, middle and high-end users will bear the brunt. Small businesses have expressed concern, warning that higher costs could lead to reduced operations or job cuts.
Government's Justification
Authorities argue that the increase is necessary to ensure the financial stability of the power sector and maintain uninterrupted supply. The CEB has been operating at a loss due to rising global energy prices and the depreciation of the Sri Lankan rupee.
Broader Economic Context
This is the third tariff adjustment in 2024, following hikes in January and May. Sri Lanka continues to grapple with its worst financial crisis in decades, marked by high inflation and foreign exchange shortages. The International Monetary Fund (IMF) has urged the country to implement cost-reflective pricing as part of its bailout program.
Public Reaction
Consumer groups have criticized the move, calling it an additional burden on households already struggling with high living costs. Protests have been reported in Colombo, with activists demanding a reversal of the tariff hike and better governance of state utilities.
The utility commission stated that it will review tariffs quarterly to adjust for market conditions. Meanwhile, the government is exploring renewable energy projects to reduce dependence on costly imported fuels.
