By: Staff Writer
September 08, Colombo (LNW): Despite trade union unrest and a controversial restructuring process, the Ceylon Electricity Board (CEB) has quietly submitted yet another proposal for a tariff hike to the Public Utilities Commission of Sri Lanka (PUCSL). The request, made last week, seeks a 6.8% increase in electricity charges, even as the state utility records a return to profitability.
A senior PUCSL official confirmed receipt of the proposal but declined to reveal details until its formal release later this week. However, CEB insiders admitted the proposed hike is already on the table, though not yet approved.
The irony is glaring. After bleeding losses of Rs. 18.47 billion in the first quarter of 2025, the CEB swung back into the black, posting a Rs. 5.31 billion profit by the quarter ending June. The turnaround followed the June tariff revision, which increased rates by 15% despite CEB initially demanding 18.3%. Yet, when compared with Rs. 34.53 billion profit recorded in the same quarter last year, the latest earnings represent an 85% plunge, raising questions about long-term financial sustainability.
Industry experts note that tariff adjustments have now become a double-edged sword. While they are necessary to meet the International Monetary Fund’s (IMF) requirement for cost-reflective pricing, they come at the expense of consumers already battered by a rising cost of living. The January 2025 tariff cut of around 20% largely a political decision created an artificial loss in the first quarter, but PUCSL has already ruled that deficit out of the June–December 2025 pricing formula. Instead, any shortfalls or surpluses from the first half of 2025 will be carried forward into the 2026 calculations.
Adding to the controversy, the PUCSL rejected a disputed Rs. 8.2 billion negative revenue adjustment highlighted by the Auditor General. According to CEB’s own forecast, electricity sales for the second half of 2025 are expected to hit 9,329 GWh, generating a colossal Rs. 230.7 billion in revenue of which domestic users will shoulder the heaviest burden, accounting for Rs. 210.7 billion.
The latest tariff revision in June has already pushed up household bills. Smaller domestic users consuming fewer than 30 units saw their per-unit charge rise by 8% and fixed charges increase by Rs. 5. Higher consumption brackets faced even steeper hikes, while industrial, hotel, and general-purpose categories also recorded sharp increases.
Now, with another 6.8% hike under consideration, consumer advocates warn that electricity affordability will become a serious economic flashpoint. While CEB insists tariff hikes are necessary for financial recovery, the optics of demanding higher prices amid reported profits are bound to ignite public anger.
Analysts caution that the tariff formula though transparent on paper risks turning into a blunt instrument that prioritizes IMF compliance over consumer welfare. If CEB continues to chase profitability through back-to-back hikes, the very citizens who bailed the utility out during its crisis will be left footing an ever-growing bill.
The looming tariff revision, therefore, is not just a technical adjustment; it is a political and economic litmus test for how Sri Lanka balances fiscal discipline with social equity.
