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Wednesday September 27th, 2023

Select consumers in Sri Lanka required to pay electricity bills in dollars: regulator

ECONOMYNEXT – Sri Lanka will require selected consumers to pay electricity bills in dollars, the Public Service Utilities Commission (PUCSL) has said, as tariffs were raised for the first time in nine years amid crippling forex shortages.

Consumers from the Industry, Hotel and General categories who generate over 60 percent of revenue in foreign currency will have to pay bills in dollars from September 01, 2022, converted at the buying rate declared by the Central Bank of Sri Lanka (CBSL) for that date.

Consumers who fall under this scheme will receive a 1.5 percent discount on their bills.

The decision was made “despite several objections raised against the proposed scheme,” the PUCSL said.

Sri Lanka’s forex crisis is making it difficult to import essentials like fuel and gas, with suppliers unwilling to give the debt defaulted country grace periods to pay up.

The island has attempted to drive up its foreign reserves by cracking down on people sending in forex through unofficial systems and awarding premiums to those who use the banking system.

The Central Bank also attempted to induce expats to send in forex to approved bank accounts in April, but most resisted, saying that they would not send in money till then President Gotabaya Rajapaksha, who they blamed for the economic crisis, resigned.

After Rajapaksha’s resignation #srilankadollarchallenge trended briefly on Twitter, with expats sharing receipts of their forex transfers to Sri Lankan banks.

However, with President Ranil Wickremesinghe’s alleged crackdown of protestors, some expats are once again saying that they will not help a president who “abuses” their people. (Colombo/Aug10/2022)

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Sri Lanka rupee opens at 323.50/324.10 to the US dollar, bond yields stable

ECONOMYNEXT – Sri Lanka’s rupee opened at 323.50/324.10 to the US dollar on Wednesday, after closing on Tuesday at 323.70/324.20 to the US dollar, dealers said.

A bond maturing on 01.08.2026 was quoted at 15.50/70 percent on Wednesday up from Tuesday’s close at 15.45/65 percent.

A bond maturing on 01.05.2028 was quoted at 14.50/55 percent from closing at Tuesday at 14.30/55 percent. (Colombo/Sep27/2023)

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Sinopec to go up to 200 Sri Lanka pumping stations, more possible: Minister

ECONOMYNEXT- China’s Sinopec which has been assigned 150 fuel retail outlets in sri Lanka which were operated by Ceylon Petroleum Corporation, has been given the nod to set up another 50 stations, Energy Minister Kanchana Wijesekera has said.

Out of 150 stations, Sinopec has already signed up 145, Minister Wijesekera had said at a dealer convention of the new company.

‘Also we have given them the opportunity to start 50 brand new stations, in locations that may fit the requirements that exists,” Minister Wijesekera said in comments broadcast by Sri Lanka’s Derana Television.

“But it is not necessary to be restricted to 200 fuel stations. If there are any requests made by you we will be open to consideration for agreements with dealers and distributors.”

Minister Wijesekera attended the dealer convention where China’s ambassador to Colombo Qi Zhenhong was also present.

Sinopec was supposed to enter Sri Lanka in 2003 under current President Ranil Wickremesinghe who was then Prime Minister. At the time India’s IOC entered Sri Lanka.

“Under the leadership of the then prime minister Ranil Wickremesinghe, two companies asked to take part in the retail operations,” Minister Wijesekera said.

“Unfortunately due to the change of government in 2004 the companies could not take part, and due to the political changes and policy changes.

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Sri Lanka making new laws for Colombo financial zone: President

ECONOMYNEXT – Sri Lanka is drawing up a new law for Colombo Financial Zone at the Port City and also an economic commission replace the Board of Investment, President Ranil Wickremesinghe ha said.

Sri Lanka wanted to position itself as a central player in the region providing services including legal and dispute resolution. Several new laws were in the cards.

“One is the new legislation which will replace the port city to make it a Colombo financial zone with jurisdiction for offshore activity,” President Wickremesinghe was quoted as saying at a symposium on alternate dispute resolution.

“The new law has been drafted. And we will see the light of day before the end of the year. Secondly, the BOI will be replaced with the Economic Commission. Which is also looking at the resolution of disputes.”

Sri Lanka has set up an Alternate Dispute Resolution Centre in 2018.

Sri Lanka was looking at Singapore as an example and should strive to match or surpass the country except for costs where it should be a competitive advantage, President had said.

There was a void in the region Sri Lanka can fill.

“This is the key lesson to be derived. Furthermore, it is essential for all lawyers and individuals involved in legal services to broaden their perspectives and explore opportunities beyond their current scope,” he said.

Singapore however has monetary stability and has rejected printing money for growth. Sri Lanka on the other runs from one currency crisis to another by cutting rates with printed money for growth (targeting so-called potential output).

Sri Lanka has in a new law legalized printing money for growth in a new monetary law, the very strategy that drove the country into series of currency crises and eventual default, critics have warned.

The Port City however is a dollarized zone, which will be free of ‘monetary policy’ for growth. (Colombo/Sept27/2023)

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