17 July 2024 04:25 am Views - 859
Production of confectionaries underway
Businesses were yesterday urged to pass on the benefits from the recent electricity tariff reduction to consumers, who are grappling with the country’s high cost of living.
In Sri Lanka, it is typical for businesses to quickly increase prices at the slightest rise in utility charges, but are highly reluctant to reduce them.
Minister of Power and Energy, Kanchana Wijesekera yesterday strongly urged the business community to alleviate the public burden by lowering prices, starting from midnight on the day of the electricity price adjustment.
“There has been a significant 20 percent price reduction for factories and small businesses in this electricity tariff revision. Despite this reduction, it appears unlikely that the prices of goods and services, which typically rise on the same night as electricity price hikes, will decrease accordingly,” said Wijesekera.
Recently, fuel and kerosene prices dropped, but the benefits were not passed on to consumers.
“Therefore, with the substantial decrease in electricity costs this year, we urge the public to take advantage of these savings, with potential for at least a 20 percent reduction in overall expenses,” he said.
Escalating prices of coal, fuel, and other commodities due to the Russian-Ukrainian war contributed to the need for an electricity price revision, the first since 2014, which took place in August 2022. However, Wijesekera noted that this time, several key factors contribute to a 22.5 percent reduction in electricity prices.
“Notably, there has been a significant improvement in the economic situation. Additionally, over the past two years, there has been an increase in rainfall, leading to higher hydropower generation.
Renewable energy production has also seen a rise. In April, electricity from the Uma Oya hydropower plant was integrated into the national grid,” he said at a press briefing held at the President’s Media Centre (PMC).
During the peak of electricity billing, the production cost per unit was approximately Rs.48.00, which has now decreased to Rs.35.00.
According to the Minister, over the last 18 months, the Ceylon Electricity Board (CEB) has worked to reduce operational costs. No new employees have been hired, reducing the workforce from 26,000 to 22,000.
Wijesekera shared that the focus is on implementing an electricity generation plan that emphasises efficiency and low operating costs. Prior to 2022, the power sector consistently operated at a loss.
“However, we have achieved operating profits in both 2023 and 2024. Due to our agreement with the International Monetary Fund (IMF), funding for the CEB from the Treasury has ceased since August of last year.
espite this, through stringent financial discipline, we have successfully steered the CEB into a profitable position. Significant efforts have also been made to repay a substantial portion of CEB’s debts to other institutions,” he said.
Looking ahead, he noted that the key to further reducing electricity tariffs lies in lowering generation costs, which necessitates the rapid establishment of cost-effective power plants.
The new facilities are projected to be operational within the next three years, promising additional reductions in electricity charges thereafter.
The government has decided to revise the electricity tariff every January, April, July, and October each year. Following the price adjustment in March, the Public Utilities Commission (PUCSL) requested a July revision instead of April. The next revision is scheduled for October.