Only nominal hike in electricity bills

Uditha KUMARASINGHE

COLOMBO: Power and Energy Minister W.D.J. Seneviratne yesterday assured that the Government has decided only on a nominal increase in electricity tariffs to soften the burden on consumer.

According to the new formula devised by the Ceylon Electricity Board (CEB), a 30 per cent fuel adjustment charge will be added to the electricity bill of consumers who use more than 90 units of electricity per month.

“The Government’s intention is to give more concessions to low income groups who use below 90 units of electricity,” the Minister told the weekly Cabinet press briefing yesterday.

“Therefore the electricity charges will not be increased to a large extent. President Mahinda Rajapaksa has also instructed to provide every possible relief to consumers. The Government has no intention to put unnecessary burdens on the people. It has also decided to provide a continuous supply of electricity without resorting to power cuts.”

“The Government through this move will introduce a programme which will discourage consumers of unnecessary use of electricity. The entire world is facing a power crisis.

Power conservation methods have been implemented throughout the world,” he said.

According to the Minister, the total amount of electricity consumers in the country amounts to 3.8 million. Of them, 2.7 million consumers use below 90 units of electricity per month. Therefore the increase in electricity tariffs will not unduly affect consumers who use below 90 units.

The Ministry through the increase of this tariff intends to obtain Rs. 44 billion per year. This will permit the CEB to operate without incurring losses. The Treasury and the Ceylon Petroleum Corporation have informed that they are unable to subsidise CEB any further. “We have to find our own source of income to maintain the CEB.”

Seneviratne said the CEB’s total expenditure was Rs. 138 billion in 2007. However, it has earned only Rs. 94 billion by the sale of electricity. In this situation, the CEB recorded a Rs. 44 billion loss. Out of this Rs. 138 billion total expenditure of the CEB, the CEB has to pay Rs. 109 billion for fuel.Therefore the income gained by the CEB is not sufficient even to pay for the fuel purchased, the Minister said.

A decision was taken to increase the tariff on electricity charges to overcome this situation. The Ministry published the gazette notification to amend the electricity charges on February 1.

Following public views obtained by the CEB, 98 per cent of the people have accepted that tariffs on the electricity charges should be increased to absorb the huge loss faced by the CEB, the Minister said.

“Sri Lanka uses the largest volume of crude oil for power generation. Even today 65 per cent of the country’s electricity is generated using crude oil. During the past one and half years, the crude oil price went up by 100 per cent. The price of a barrel of crude oil which was between US$ 50 to 53 in 2005 has gone up to US$ 110 at present,” he said.