No room for discriminatory electricity tariffs anymore: Advocata

Colombo-based free-market think tank Advocata Institute cautioned against the implementation of discriminatory tariffs for electricity as any further concessions will not only be unfair to the vulnerable segments but will also increase the overall burden on the economy.

The only justification for a discriminatory tariff is for a lifeline tariff for the poor which is included in the existing tariff structure, the think tank pointed out. “During this time of national calamity due to the economic crisis, everyone should demonstrate restraint, especially religious leaders. 

The government has to practice austerity to reduce its fiscal deficit, so they are not in a position to offer a subsidy,” Advocata said in a statement.
The recent increase in electricity tariffs has drawn opposition mainly from Buddhist clergy and other religious leaders, whose places of worships enjoyed concessionary electricity tariffs before the new tariff structure came into being in August. 

Any concession will have to be in the form of a cross-subsidy, which will further burden other electricity consumers who are currently struggling to make ends meet due to very high inflation, Advocata pointed out.
It suggested that in collaboration with the Ceylon Electricity Board (CEB), religious organisations could actively promote energy conservation using LED lighting, and energy-efficient equipment, and reorganise activities in ways that reduce energy use.

The Public Utilities Commission Sri Lanka (PUCSL) recently approved an overall tariff increase of 75 percent. The public and businesses are pushed to pay much higher charges for electricity while grappling with the ongoing economic crisis.

Advocata Institute justified that the increases were necessary because the prices charged to consumers were below cost leading to large deficits. Financing these energy subsidies through money printing contributed to the ongoing balance of payments crisis.