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Saturday March 2nd, 2024

Sri Lanka could face longer power cuts, bus operators may withdraw as fuel shortages bite

Lakvijaya power plant comes under fire from Parliament

ECONOMYNEXT – Sri Lanka power cut length could rise further a power sector union said, while transport operators warned they may have to take private buses off the road if diesel supply continued to be restricted due to forex shortages.

The daily power cut duration has increased to 13 hours for Thursday with the main grid losing 800 MW for two days after thermal power stations were forced shut down.

Drought has reduced Sri Lanka’s hydro power generation capacity, while severe dollar shortage has hit the island nation’s capacity of ensuring timely import of fuel stocks for power generation.

State-run Ceylon Petroleum Corporation has said there would be restrictions in diesel supply until a ship is unloaded.

“It is clear that due to these circumstances, we currently have a 10 hour power cut and if this continues, the power shedding may extended for 12 or maybe 15 hours per day,” Anil Ranjith Induwara, President of the CEB Engineers Association told reporters on Wednesday (30).

Induwara warned that the country could be in dark during the upcoming new year in mid-April if the fuel shortage continues and the country receives no rains.

Sri Lanka’s foreign reserves have depleted and and the country is mainly depending on a 500 million US dollar Indian credit line for fuel.

Unexplainable Rise  

CPC, Chairman Sumith Wijesinghe told reporters that diesel consumption was rising fast.

Diesel consumption in January 2021 was 139,000 metric tonnes in January 2021 and it had risen to 189,000 MT in January 2022.

On Tuesday (29) the CPC said no diesel will be delivered for power generation and public consumption on Wednesday (30) and Thursday (31) as it was unable to unload a 37,500 metric ton diesel a consignment at the main Colombo port.

Wijesinghe expects the CPC will be able to deliver diesel to the market only from April 01, 2022.

Grim Reality 

The Public Utilities Commission of Sri Lanka (PUCSL) has said the water level have decreased to 27 percent in reservoirs and it needs to utilized for drinking and agriculture as well as power generation.

The power crisis may further extended if Sri Lanka is unable to secure coal consignments in the next five months, officials say.

“We have not secured enough coal and for the last 4 consignments of coal, we have not paid due to the forex issue,” Janaka Rthanayaka , the Chairman of the PUCSL told reporters on Tuesday.

“It will be difficult to unload coal in the off season. If that happens, we will be in a much bigger issue than we are now in 5-6 months.”

Rathnayaka said, if the power shedding further extends, the ongoing economic crisis could worsen with all sectors being forced to seize operations during power cuts.

“Even if we get the fuel, until we get to the rainy season, we will face this power shedding and if the authorities do not invest in more power plants in the next two years, it will be much worse than now.”

Private Transport at Stake 

Private transport providers warned the government that the island wide transportation service providers will withdraw from the services next week on wards if the fuel shortage issues is not

The President of the Private Bus Owners’ Association, Gamunu Wijerathna said the transportation is already being limited due to the diesel shortage.

“We ask the government not to test our patience and if these issues are not being answered by next week, we have already discussed with other association and we will withdraw from all transportation services island wide,” Wijerathna said.

Sri Lanka’s inter district school transport services association also warned to withdraw from school transportation from Friday on wards due to the fuel shortage.

“These days we are struggling to provide services. We are doing this mainly because of these children who will miss their education and due to exams days are coming,” N.M.K Harishchandra Padmasiri, President of the association, told reporters on Wednesday.

“We tried to talk with authorities but have not received any positive feedback. From this Friday on wards, if we do not get a proper answer we will withdraw from services.” (Colombo/ March 30/2022)

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  1. Dayan says:

    this country is getting sun light for about 9 hours a day. Power cuts due to non availability,of water in the reservoirs. So 15 hours power cut is being proposed by Engineers of the CEB. Are you all not ashamed of this as you have failed to propose or arrange to use solar power for 9 hours a day.

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  1. Dayan says:

    this country is getting sun light for about 9 hours a day. Power cuts due to non availability,of water in the reservoirs. So 15 hours power cut is being proposed by Engineers of the CEB. Are you all not ashamed of this as you have failed to propose or arrange to use solar power for 9 hours a day.

Sri Lanka eyes SOE law by May 2024 for better governance

ECONOMYNEXT – Sri Lanka is planning to pass a Public Commercial Business (PCB) Act improve governance of state-owned enterprise by May 2024 as part of an anti-corruption efforts following an International Monetary Fund assessment.

Sri Lanka’s state enterprises have been used by politicians to give ‘jobs of the boys’, appropriate vehicles for personal use, fill board of directors and key positions with henchmen and relatives, according to critics.

Meanwhile macro-economists working for the state also used them to give off-budget subsides or made energy utilities in particular borrow through supplier’s credits and state banks after forex shortages are triggered through inflationary rate cuts.

The government has taken billons of dollars of loans given to Ceylon Petroleum Corporation from state banks.

There have also been high profile procurement scandals connected to SOEs.

An SOE Reform Policy was approved by Sri Lanka’s cabinet of ministers in May 2023.

The Public Commercial Business (PCB) Act has now been drafted.

A holding company to own the SOEs will be incorporated and an Advisory Committee and Board of Directors will be appointed after the PCB law is approved, the statement said. (Colombo/Mar01/2024)

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Sri Lanka rupee closes at 308.80/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 308.80/90 to the US dollar Friday, from 309.50/70 on Thursday, dealers said.

Bond yields were broadly steady.

A bond maturing on 01.02.2026 closed at 10.65/75 percent up from 10.50/70 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent from 11.90/12.10 percent.

A bond maturing on 01.07.2028 closed at 12.15/35 percent down from 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent up from 12.30/45 percent.

A bond maturing on 15.05.2030 closed at 12.30/45 percent down from 12.35/50 percent.

A bond maturing on 01.07.2032 closed at 12.50/13.00 percent from 12.55/13.00 percent. (Colombo/Mar1/2024)

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Sri Lanka stocks close up 0.37-pct, Expo to de-list

ECONOMYNEXT – The Colombo Stock Exchange closed up 0.37 percent on Friday, and SG Holdings, the parent company of Expolanka Holdings Plc, said it was taking the company private.

Expolanka is the largest listed company on the Colombo Stock Exchange.

“Expolanka Holdings PLC has, at the Board Meeting held on 1st March 2024, considered a request from its principal shareholder and resolved to initiate the de-listing of the Company’s shares from the Official List of the Colombo Stock Exchange subject to obtaining necessary shareholder approval and regulatory approvals,” the company said in a stock exchange filing.

As per arrangements with SG Holdings Global Pte Ltd, the Company’s majority shareholder, it will purchase its shares from shareholders who may wish to divest their shareholding in the Company at a purchase price of Rs 185.00 per share. The share closed up at 150.50.

The broader All Share Index closed up 0.37 percent, or 39.47 points, at 10,691; while the S&P SL20 Index closed down 0.64 percent, or 19.59 points, at 3,037.

Turnover stayed above the 1 billion mark for the sixth consecutive day, registering 1.4 billion.

Crossings in Melstarcorp Plc (135mn) up at 89.50, Hatton National Bank Plc (64mn) up at 158.00, Hemas Holdings Plc (53mn) up at 75.00 and Central Finance Company Plc (26mn) up at 103.50, added significantly to the day’s turnover.

“The upward trend is continuing, with more retail buying also coming in, the number of trades was more than 10,000 today,” a market participant said. “Investors are looking for undervalued stocks and buying in quantities.” (Colombo/Mar1/2024).

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