Sri Lankan power company targets 835% price hike – Markets

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COLOMBO (Reuters) – Sri Lanka’s hugely loss-making state-owned electricity monopoly has demanded a shocking price hike of more than 800% for its poorest customers as the bankrupt country has run out of fuel, it said. regulators on Monday.

The South Asian nation has been hammered by a currency crisis, leaving it desperately 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 demanded an 835% price hike for smaller, heavily subsidized electricity consumers, the Public Utilities Commission of Sri Lanka (PUCSL).

Currently, anyone using less than 30 kilowatts per month pays a flat rate of 54.27 rupees ($0.15), which the CEB was seeking to raise to 507.65 rupees ($1.44).

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

“Therefore, we offered a direct grant from the Treasury to keep the increase to less than half of what they asked for.”

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

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

The government imposed 13-hour blackouts a few months ago, but blackouts have been reduced to around four hours a day as rains have filled hydroelectric reservoirs.

Over the past six months, the government has already quadrupled the price of diesel and more than two and a half times that of petrol.

Sri Lanka remains virtually diesel and petrol free. The energy minister said he was unable to say when new stocks will arrive in the country, which does not have its own oil.

Kanchana Wijesekera apologized to motorists on Sunday and announced that two ministers were traveling to Moscow to get cheaper Russian oil.

Wijesekera himself traveled to Qatar to negotiate favorable terms for hydrocarbon imports.

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

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

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

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