The public group endowed with the monopoly of the supply of electricity in Sri Lanka, heavily in deficit, wants to increase its tariffs by more than 800%, to the detriment of the poorest.
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The country, plagued by the worst economic crisis since its independence in 1948, is short of dollars to import the fuels necessary for the production of electricity.
In this context of crisis, the CEB (Ceylon Electricity Board), the only electricity supplier in Sri Lanka, controlled by the State, which showed a loss of 65 billion rupees (185 million dollars) in the first quarter, claimed an 835% increase in subsidized tariffs for the poorest households, the Public Utilities Commission of Sri Lanka (PUCSL) explained on Monday.
The pricing system in force until now allows a household consuming less than 30 kilowatts per month to benefit from a flat rate of 54.27 rupees (0.15 dollars), which the CEB now wants to raise to 507.65 rupees ($1.44).
For the president of the PUCSL, Janaka Ratnayake, “the majority of consumers will not be able to cope with such an increase”. “This is why we are proposing a direct subsidy from the Treasury to reduce by more than half the increase demanded” by the CEB, he explained to the press in Colombo.
The government has not yet decided on the tariffs applied to individuals, but those for trade and industry will increase by 43 to 61%, he said. The CEB will also be able to rely on the contribution of users who hold dollars, such as exporting companies, in order to finance the import of oil and spare parts.
Since the beginning of the year, diesel prices have more than quadrupled and those of gasoline more than doubled in Sri Lanka, where these two fuels are in short supply. The Minister of Energy, Kanchana Wijesekera, said he could not give a timetable for the next deliveries in a country entirely dependent on foreign countries for its oil supply.
The minister, after apologizing to motorists on Sunday, announced that two of his colleagues were on their way to Moscow to negotiate lower fuel prices. Mr. Wijesekera himself went to Qatar to also negotiate a drop in the prices of hydrocarbons supplied to Sri Lanka.
On Monday, the government was forced to announce the suspension of all fuel sales for two weeks, from midnight on the night of Monday to Tuesday, except in essential sectors such as health.
A decision which aims to “preserve the small reserves of fuel that we have left”, explained government spokesman Bandula Gunawardana, apologizing once again to consumers.
Unable to repay the approximately $51 billion it owes in foreign debt, Sri Lanka invoked the default in April to begin negotiations with the International Monetary Fund (IMF).
A US Treasury and State Department delegation arrived in the country to “explore the most effective ways for the United States to help Sri Lankans in need,” the US embassy in Colombo said.
The United Nations warned on June 10 that the unprecedented economic crisis in Sri Lanka could turn into a serious humanitarian crisis, with millions of people already in need of aid.