02/17/2023, 19.27
Send to a friend

Government-owned utility hikes rates by 66 per cent to secure international loans

by Arundathie Abeysinghe

Yesterday’s decision by the public utility has had an immediate effect. This is part of the government’s goal of getting the International Monetary Fund to provide funds that will revive the economy. Both ordinary citizens and business associations are unhappy with it. Food prices rise 10 per cent overnight.

Colombo (AsiaNews) – Yesterday, the Ceylon Electricity Board (CEB), a government-owned utility, raised its rates by 66 per cent with immediate effect, a move the government hopes will convince the International Monetary Fund (IMF) to provide a loan to save the economy, which has been reeling for about a year.

The decision – which did not spare even the garment industry, Sri Lanka’s main exporter –  has sparked a wave of protests across the country.

Last month, a petition garnered 6.9 million signatures against higher rates, the third attempt to counter government actions over the past five months. Last year, rates were hiked by 75 per cent.

Since last year, power cuts have become routine, up to 13 hours a day; after the latest rate hike, the government pledged that there would be no more.

As economic hardships deepen and inflation topped 54 per cent in January with the upper income tax rate at 36 per cent, popular disgruntlement has grown by leaps and bounds.

Janaka Ratnayake, chairman of the Public Utilities Commission of Sri Lanka (PUCSL), announced that he was going to take legal action against the decision to increase.:

“I will go on behalf of the general public," he said yesterday, even if a majority of 115 MPs could remove him from his post.

Economic analysts Nimeshi Attanayaka and Sandeepa Dickwella told AsiaNews that the increase in rates was decided to compensate for government help to the CEB, but "it will be unbearable for the average consumer, making electricity, a luxury.”

For the experts, “instead of increasing bills, it is necessary to restructure the CEB. Currently, it has 27,000 employees, but most work, such as power lines maintenance, is outsourced.”

At a press conference, Energy Minister Kanchana Wijesekera said that the increases will produce a gain of 288 billion rupees that will not cover past losses for the CEB, but pay for its operating costs.

Meanwhile, the members of the Joint Apparel Association Forum are alarmed by the impact of rising electricity rates on the sector.

The CEB’s proposed hike “is based on an overestimation of demand, which in turn leads to unnecessarily high tariffs being imposed on the consumer. Sri Lanka needs to have a tariff that is justified and competitive vis-à-vis our key competitors.” 

MP Patali Champika Ranawaka, an electrical engineer by training and a former Power and Energy minister, lashed out at the rate increase. “With the electricity hike, people have no option, but to protest,” he said.

For him, the “governments of former presidents Gotabaya Rajapaksa and Chandrika Bandaranaike collapsed due to an electricity crisis. Hence, the current government should avoid such a situation. CEB has been considered as one of the largest loss-making entities attributed by detractors due to wastage and corruption.”

Meanwhile, food prices have jumped by 10 per cent since yesterday.

“We can’t bear these costs anymore,” said Asela Sampath of the All Island Canteen Owners Association, which represents the restaurant sector frequented by middle- and low-income Sri Lankans. “We have no option but to increase prices as we use electricity to bake and cook.”

Bakery products also saw prices rise, including those sold by street vendors, with sales dropping drastically.

Some Choon Paan (music bread in Sinhala) bread vendors, who sell their product from their three-wheeled vehicles, complain that “not even during the pandemic lockdowns did we experienced this kind of situation".

Ordinary consumers are also in a quandary. “Now there is no way to use the appliances we bought,” said Kamani Karunathilake, a mother of three, speaking to AsiaNews.

“If you turn on an appliance, a big bill will come at the end of the month. Now we have to live with a single light or with candle light.”

(Melani Manel Perera contributed to the article)

Send to a friend
Printable version
See also
With more than half a million accounts closed, many S Lankan families are now in the dark
13/11/2023 17:12
Sri Lanka’s foreign debt crisis leads to shortages in basic necessities
27/01/2022 14:37
Fishermen protest against higher kerosene prices
Russian-Ukrainian war a blow to Colombo's economy
22/03/2022 12:15
Women leading fight against rising prices
15/10/2021 17:01


Subscribe to Asia News updates or change your preferences

Subscribe now
“L’Asia: ecco il nostro comune compito per il terzo millennio!” - Giovanni Paolo II, da “Alzatevi, andiamo”