CB Chief justifies electricity tariff hike

Saturday, 20 August 2022 01:23 - - {{hitsCtrl.values.hits}}

Says State-run CEB and CPC are making massive losses
Opines cost-reflective mechanism should have been implemented much earlier
Explains all dues should be paid or settled by taxpayers
Dismisses concerns raised by apparel sector and industries in FTZs
Says benefits enjoyed over past 9 years in contrast, burdened banking system, SOEs, Govt.
Argues if low-income families can continue to afford electricity tariffs on behalf of someone else’s usage

By Charumini de Silva

Central Bank Governor Dr. Nandalal Weerasinghe on Thursday defended the Government’s decision to revise upwards the electricity tariff, pointing out that the measure was long overdue.

“Cost-reflective pricing mechanism was important and, in my view, it would have been better if it was implemented earlier,” he said in response to queries posed at the post-Monetary Policy Review meeting on Thursday.

“These organisations are making huge losses,” he added, pointing out the tariff revision came after nine long years.

The Public Utilities Commission of Sri Lanka approved the Ceylon Electricity Board’s (CEB) request to increase electricity tariffs by 75% on average for all categories from 10 August.

However, hoteliers, free-trade zone factories, and the apparel industry have strongly opposed the upward tariff revision, citing it was unfair amidst the ongoing economic crisis and high costs will make them uncompetitive.

“Think of all the benefits these organisations opposing tariff revisions enjoyed during the past nine years by way of concessions and subsidies, in contrast to the burden it had on the banking system, the organisations like CEB, the Ceylon Petroleum Corporation, and the Government,” Dr. Weerasinghe argued.

He explained that these dues in the form of electricity bills should be settled or paid by all taxpayers.

“Do we need to put that continuous burden on taxpayers or pass it to the actual electricity users? Do you think low-income people are willing and can continue to afford the electricity tariff on behalf of someone else?” he asked.

Dr. Weerasinghe implied it was long overdue to rectify this mistake, despite the implementation of it could have been on an earlier instance, before the economic crisis.

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