ECONOMYNEXT – Sri Lanka’s Ceylon Electricity Board has lost 18.2 billion rupees in the first eight months of 2023, due to controlled prices, the Finance Ministry has said in a report.
CEB revenues were 402 billion in the first eight months of 2023, compared to 172 billion after an initial 66 percent tariff hike given to the agency ahead of an International Monetary Fund program.
The regulator cut the controlled price by 14.4 percent in mid-2023, higher than the 3 percent cut requested by the CEB, triggering an interim tariff hike to win a news staff level agreement from the International Monetary Fund for next year.
The CEB lost 20.8 billion rupees up to August “owing to the delayed and limited tariff which was not adequate to compensate for the significant increase in generation cost,” the Finance Ministry said.
Generation costs had risen 55 percent to 324 billion rupees in the first eight months of 2023, up from 209.4 billion rupees last year amid high fuel and coal prices.
Sri Lanka’s rupee collapsed collapsed from 200 to 360 to the US dollar in 2022 amid inflationary open market operations but appreciated to 330 amid deflationary open market operations from around September 2022 and the lifting of a surrender rule in March 2023.
The CEB also buys fuel at tax plus prices.
Dut to higher interest rates, finance cost had risen to 42.2 billion rupees in the first eight months, from 18.2 billion rupees the previous year.
Cost per unit at selling point had gone up to 45.71 rupees per kilo Watt hour, from 29.17 rupees per kilo Watt hour last year.
The CEB is charging up to 89 rupees from domestic consumers, under regulated tariffs while giving lower tariffs to discriminating customers based on their business activities.
The government is taking some of the liabilities off the books of the CEB adding to the nationals amid losses accumulated.
Long term borrowings fell to 230.6 billion rupees by August 2023, from 396 billion in August 2022.
But, the CEB had unpaid obligations to the Ceylon Petroleum Corporation, and Independent Power Producers of 212.3 billion rupees as at end of August 2023. (Colombo/Nov20/2023)