Monday, December 11, 2023

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Does Sri Lanka neglect possibility to save US$ 150 million per month without subscribing to power cuts and fuel and gas queues?

The costs and negative impacts of major power outages in Sri Lanka reach all industries creating social distress. Sectors such as tourism, export, healthcare, education, manufacturing, government and private services, retail and finance are vastly affected.

Moreover, the total workforce in Sri Lanka is being disrupted. Their productivity levels are reduced. For instance, the export sector workforce is facing many challenges when long power cuts are taking place. They are unable to conduct daily export-related operational activities efficiently, have no proper access to technology/internet, ineffective communication with their buyers in other countries. All these inefficiencies lead to decreased export revenue for Sri Lanka.

One of the solutions to end power cuts and fuel and LP gas queues in Sri Lanka is to increase the diesel and petrol prices.

Sri Lanka’s total imports spend per month on energy and fuel is USD515 million. Out of this, USD450 million is spent on fuel, USD35 million on gas and USD30 million on coal. From the USD450 million, USD150 million worth of fuel is required for electricity generation and for the remaining USD300 million worth of fuel imports, the government can increase prices for petrol and diesel to reduce consumption by 50 %. (Special fuel vouchers can be given to fishermen to purchase fuel for commercial fishing)

These power cuts are being carried out as a temporary solution to recover the losses incurred by the Ceylon Electricity Board (CEB), and by calculation the total amount of US$ 150 million spent on fuel for power generation per month consumes US$ 05 million per day, out of which only US$ 2.5 million is expected to be saved via the subscription to a 12-hour power cut.

The total electricity generated and consumed yesterday (30th March 2022) was 39GWh. The total electricity generated in Sri Lanka within any given 24 hours on average is 49GWh. Therefore, the total energy saved during a 12-hour power cut in Sri Lanka is only 22%. This indicates that imposing long power cuts would not limit the usage of electricity by a considerable amount.

Instead of cutting power, the government should increase the prices of fuel (petrol/diesel) to reduce the consumption of fuel.

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