The Sri Lankan government is facing criticism over its handling of electricity tariffs, with allegations of double standards, misinformation, and a lack of transparency surfacing amidst growing public concern. Despite earlier claims of profitability and tariff reductions, the government and the Ceylon Electricity Board (CEB) are now signaling the possibility of a significant price hike—raising questions about the accuracy and consistency of their financial narratives.
At the heart of the controversy is the government’s agreement with the International Monetary Fund (IMF) to adopt a cost-reflective pricing model for electricity, which requires full cost recovery over time. This model, intended to stabilize the energy sector, stipulates that any profits made by the CEB should be passed on to consumers as relief. Conversely, losses would justify tariff increases.
Available data shows that the CEB recorded a profit of Rs. 51 billion during the first half of 2024. Based on this performance, industry experts argue that electricity tariffs should be reduced—not increased. In fact, earlier this year, the CEB even proposed a 10–20% tariff reduction, citing strong financial performance in the first quarter of 2025.
Yet, the narrative appears to be shifting. The government, through Energy Minister Kumara Jayakody, told Parliament it has “no intention” to raise tariffs, but also implied that electricity pricing is critical to managing national debt. The minister admitted that a clearer picture will only emerge next month after the CEB submits its financial data to the Public Utilities Commission of Sri Lanka (PUCSL). So far, no such submission has been made.
Meanwhile, the PUCSL is under pressure to finalize public consultations and approve any tariff changes by July 1, as the revision is a key benchmark for unlocking a US$344 million IMF loan tranche. Critics argue that this process is being manipulated to portray the CEB as financially distressed, thereby justifying an unnecessary tariff hike.
Fueling suspicions further is the blackout on February 9, which caused losses of around Rs. 8.4 billion. Despite prior warnings from engineers, no preventive action was taken—a pattern eerily reminiscent of the government’s handling of the 2019 Easter Sunday attacks. No investigation into the blackout has been initiated, and accountability remains elusive.
Adding to the confusion is the CEB’s new energy policy, which claims the power system is “imbalanced,” making it difficult to use renewable sources like solar, wind, and hydro. But energy experts point out that such renewable resources were used effectively during similar periods in previous years without disruption. The deliberate curtailment of green energy, in favor of expensive coal and diesel, raises environmental and economic concerns.
As of late April, the CEB had posted a Rs. 20 billion loss—just months after reporting profits. Experts argue this shift is artificially engineered to pave the way for tariff hikes. They insist the PUCSL should mandate at least a 10% tariff reduction based on available data.
With mounting inconsistencies, the government’s credibility is now under scrutiny. Critics demand transparency, accountability, and a tariff policy that prioritizes public welfare over political maneuvering.
