ECONOMYNEXT – Sri Lanka has been able to lower electricity prices in 2024 due to a stronger rupee, lower coal prices and correct decisions made including to raise prices when costs went up, Energy Minister Kanchana Wijesekera said.
From July 2024, electricity prices were cut by as much as 32 percent for households, and 38 percent for small domestic users and about 33 percent for industries and hotels.
Sri Lanka rupee was close to 400 rupees during the economic crises and interest rates were 36 percent, Minister Wijesekera said.
Due to selling below cost, the Ceylon Electricity Board, owed money to the Ceylon Petroleum Corporation, banks, thermal and renewable power producers he said.
The central bank through deflationary policy allowed the rupee to appreciate to around 320 to the US dollar by end 2023 and it is now round 305 to the US dollar.
Meanwhile Minister Wijesekera said many borrowings had been settled from profits made in recent months and interest rates were now down to 15 percent.
In addition to the stronger rupee, global coal prices were also falling.
With strong rainfall the use of diesel has been minimized he said.
New generation unit including Uma Oya and other renewables had also come on stream.
Extra rainfall received after the first tariff filing was also given to industries and hotels, he said.
The management of the Ceylon Electricity Board has also cut costs.
“In addition to generation costs CEB’s Management had done many things to reduce operational costs,” Minister Wijesekera said.
“In the last two years no new staff has been recruited. The CEB’s approved cadre is 26,000, but there is only 22,000 now.
“Bonuses and the 25 percent three year salary increment has been halted during past 18 months.
He said the salaries of technical staff salaries had to be increased.
But the practice of giving 25 percent salary increments to all staff had to be stopped.
The Public Utilities Commission and its Chairman had raised salaries at the crucial time and helped stabilize the CEB he said.
“Not only did they face criticism but also they faced threats,” Minister Wijeskera said. “Now are electricity prices comparable to some other countries.” (Colombo/July16/2024)