Electricity tariff hikes; poor subsidize the rich - EDITORIAL

In November 2019, our country’s foreign reserves stood at nearly US$ 8 billion. By the end of the following year, that figure had fallen to less than US$4 billion. By December 2021, it was down to lesser than US$2 billion, coming out of a series of Covid-19 lockdowns that had paralyzed the economy. Our country entered 2022 with very little foreign reserves to finance its ever-increasing import bills, particularly for fuel, gas, food, medicines and electricity. It also resulted in an inability to repay foreign loans, leaving the country bankrupt.

Fuel supplies took a hit from mid-January. Blackouts starting with a one-and-a-half hour period a day, were lengthened. Basic essentials, medicines and drugs became hard-to-find luxuries. Food supplies were threatened, largely because of the fuel crisis: the shortage of diesel meant that vehicles transporting vegetables, fruit and fish could not operate. 

The situation became so bad that, the World Food Programme in its monthly report said more than 80% of Sri Lankan families are consuming cheap or limited food, and this has raised the risk of malnutrition.
Adding to the misery, the Covid-19 pandemic which hit the country in 2020, resulted in huge job losses, with around 500,000 in the construction sector hired on a temporary basis, losing their employment. Thousands of other workers saw their salaries slashed by around 50%.

Lankans soon began taking to the streets in unprecedented numbers, demanding the resignation of the president and his government. After a three-month struggle, they achieved their goal - unseating both the president and his prime minister.

A new president has since taken over, but subsidies on all goods have been cut leading to an all-round price increases. The fuel shortage has eased, but the cost of fuel has made travelling extremely expensive. Cooking gas too is available, again at a cost, putting it out of the reach of the poorer sections of the population - around 40% of those using LP gas for cooking. 
Today inflation has risen to over 90%. 

In face of the rising costs of fuel and other services, in August the Ceylon Electricity Board (CEB), announced it would be forced to increase electricity tariffs. The electricity rate hike, despite inflation, is in fact the first such increase in nine years. According to the Public Utilities Commission of Sri Lanka (PUCSL), the Ceylon Electricity Board (CEB) has been allowed to increase the electricity tariff by 75%. 

The reality to consumers is far different. New rates released by the CEB have raised tariffs by a staggering 264% to the lowest users. Surprisingly those who consume higher number of units face smaller rate increases. Statistics provided by ‘Economynext’ show that two-thirds of the 7.8 million households using less than 90 kilowatts (kw) a month, will be charged the highest increases, while those who consume a higher number of units will be charged less.

For example the smallest consumers - those who were being charged Rs. 2.50 per unit earlier, will now be charged Rs. 8.00 per unit. While bigger consumers who were charged Rs. 45.00 per unit will have to pay Rs. 75.00 per unit.
While we agree that an increase in electricity tariff rates is inevitable, given the dire financial straits of the state, it appears that the government is expecting the poorer sections of society to subsidize the more affluent in society.
This is totally unfair and unacceptable. 

The least the state could do, is to at least stagger these costs thereby lessening the burden on the most downtrodden sectors, instead of hitting them with such a huge cost increase.

However, the rise in the cost of electricity is not limited to Sri Lanka alone. The developed countries in Europe and America too, are facing a rising cost of electricity. Perhaps their plight may even be worse than ours, given the fact that with winter season around the corner, poorer sections in those countries will not be able to afford heating due to the rising costs of electricity.

For the poor in Europe; especially in Britain, according to media reports, Britons are facing a choice between hunger and heating. Western Europe promotes the use of alternate sources of energy. Sadly little has been done to turn these lofty ideas into a working reality.

Our own president Ranil Wickremesinghe has spoken of the possibility of using nuclear power as means to cut our dependence on fossil fuels for power generation.
The present energy crisis is a timely warning for nations, of the need to formulate strategies to cut dependence on fossil fuels and harness the forces of nature to set up viable sources of power generation, which are possibly cheaper, cleaner and more environmentally friendly.