By: Staff Writer
May 15, Colombo (LNW): Sri Lanka’s National People’s Power (NPP)-led government has confirmed it will not abandon the International Monetary Fund (IMF) programme, despite mounting public concern over the potential rise in electricity tariffs.
Deputy Finance and Planning Minister Harshana Suriyapperuma reiterated the government’s commitment during a televised interview on Sunday (May 11), stating that the NPP had pledged during the presidential campaign to uphold the IMF agreement.
“Stability is key,” Suriyapperuma said. “We always made it clear that we would negotiate with the IMF for a programme that benefits the people—but we would not walk away from it.”
He acknowledged that while the IMF mandates tough fiscal measures, including cost-reflective pricing in key sectors, such steps are necessary for long-term sustainability. “Institutions engaged in commercial activity must recover their costs. We must invest in the right infrastructure to reduce long-term electricity costs,” he noted.
The IMF, in its most recent review, recommended a revision of electricity tariffs to address the Ceylon Electricity Board’s (CEB) growing financial losses. Tariffs were previously cut by 20% in January, a move that significantly reduced revenue.
Following this, the IMF indicated that the release of the fifth tranche of funding depends on further tariff adjustments, expected in June, following the completion of the fourth programme review.
However, Energy Minister Kumara Jayakody has expressed reluctance to increase tariffs, saying the government hopes to keep rates stable. “We haven’t made any decision just because the IMF suggested it. We are considering several factors like debt repayments and weather conditions before deciding,” he said.
Jayakody added that the CEB is yet to submit its revised pricing structure, which is expected to be presented to the Public Utilities Commission of Sri Lanka (PUCSL) by the end of May or early June. The Minister also cited recent rainfall as a potential mitigating factor, which could help avoid a tariff hike by reducing dependency on expensive thermal power.
Yet the reality facing the CEB is grim. In February 2025 alone, the utility posted a staggering net loss of Rs. 11.37 billion. This situation worsened following a nationwide power outage in early May, which resulted in an additional loss of Rs. 8.3 billion.
Initial reports dismissing the incident as being caused by a monkey have been debunked, but the financial burden now rests heavily on consumers.
The fundamental issue lies in the cost mismatch: the average cost of generating a unit of electricity (kWh) in February was Rs. 34.06, while the average selling price was just Rs. 22.55. Further compounding the crisis, system losses consume roughly 12% of total generation, slashing the volume of electricity actually sold.
The PUCSL and CEB are now in discussions over a potential tariff revision, with IMF oversight pushing for a transition to full cost-recovery pricing. With billions in losses and pressure mounting, a price hike appears inevitable—despite political assurances and public resistance.
