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Electricity tariff: CEB seeks 50% jolt  

19 Mar 2022

  • Per unit production cost soars to Rs. 29
By Maheesha Mudugamuwa The Ceylon Electricity Board (CEB) has requested a 50% tariff hike from the Government for the purpose of minimising the losses incurred by the Board following the recent fuel price revisions made by the Ceylon Petroleum Corporation (CPC), The Sunday Morning learns. The CEB is currently losing Rs. 9 per unit, as the production cost of a unit has dramatically increased to Rs. 29, from the earlier rate of around Rs. 15. Prior to the recent fuel hike, the CEB had sought a 35% increase in electricity tariffs, it is learnt. Speaking to The Sunday Morning, CEB Chairman M.M.C Ferdinando said the tariff revision was a must for the CEB to at least stay at a safety margin without incurring more losses. He said the cost of production had now increased up to Rs. 29 per unit and that the CEB was currently selling electricity at around Rs. 15. “We are incurring a loss of nearly Rs. 9 per unit,” Ferdinando stressed, adding that to minimise the loss, the Board should at least bring the unit price to around Rs. 25 or Rs. 26. He stressed that the tariff increment was not for earning profits but to merely stay at safety margins. Elaborating further, the CEB Chairman noted that the tariff hike should be cost effective, where consumers should be able to understand the tariffs that they are liable to pay. “We should have a cost-effective tariff rather than applying old traditional tariff mechanisms. The people should know what the cost they are liable to pay is. Therefore, a cost-effective tariff mechanism should be put in place,” he stressed. The CPC raised petrol (92 octane) by Rs. 77 and diesel (auto) by Rs. 55, after the Central Bank’s (CBSL) flexible exchange rate resulted in a nearly 30% depreciation in the currency within three days. The rupee has depreciated twice in the span of seven days – by Rs. 57 – against the US Dollar. Meanwhile, when contacted by The Sunday Morning, Public Utilities Commission of Sri Lanka (PUCSL) Chairman Janaka Rathnayake said the Commission was currently evaluating the request made by the CEB to increase electricity tariffs and following the conclusion of the evaluation, the commission would provide its recommendations. Elaborating further, the PUCSL Chairman stressed that the CEB could not increase tariffs without the recommendations of the commission as there was a long process that should be followed by the PUCSL. Accordingly, the PUCSL should review the proposal sent by the CEB and then publish newspaper notices stating the cost forecast and the tariff schedule for stakeholders’ comments, which would take two or three weeks. Then the commission should hold public consultations and revise the tariff proposal in line with stakeholder comments and Government policy before it publishes the revised tariff.  “Tariffs cannot be increased overnight and the CEB cannot increase its tariffs alone without the recommendations from the PUCSL,” Rathnayake said. According to the CEB, there has been no electricity tariff revision since 2014.  


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