Monday Jan 20, 2025
Monday Jan 20, 2025
Monday, 20 January 2025 06:11 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
The recently announced decision by the Public Utilities Commission of Sri Lanka (PUCSL) to reduce electricity tariffs by an average of 20% was widely lauded by various sectors, which see the move as a much needed “lifeline.”
Among the most affected are the hotel industry, exporters, manufacturers, and spice producers, which have highlighted the significant impact of tariff cuts on their operations and broader economy.
Hotels emerged as the biggest beneficiaries of the new tariff regime with a reduction of 31% in electricity costs, the highest among all sectors.
The Hotels Association of Sri Lanka (THASL) expressed deep gratitude to both the PUCSL and Energy Minister Kumara Jayakody for recognising the challenges faced by the hospitality sector.
“We greatly appreciate and are thankful for this relief, which comes at a critical time when the industry is gradually recovering. It offers an opportunity to reinvest savings into innovation and sustainable energy sources,” THASL President M. Shanthikumar told the Daily FT.
He also noted that the Association had recently presented a detailed case to the PUCSL, underscoring the urgent need for electricity tariff revision to maintain operations.
Exporters, another vital pillar of the economy, also welcome the reduction in electricity tariffs, which are a significant component of their cost of production (CoP).
National Chamber of Exporters of Sri Lanka (NCE) Secretary General and CEO Shiham Marikar highlighted the importance of the move in enabling exporters to remain competitive in global markets.
“With our exporters facing razor-thin margins, fluctuating exchange rates, and rising logistic costs, this tariff reduction of 30% provides much-needed breathing space,” he said.
He noted that the move will help exporters lower production expenses, reinvest in efficiency improvements, and offer products at a more competitive price internationally.
Marikar also stressed on the broader economic benefits, noting that increased export competitiveness would lead to greater foreign exchange earnings and job creation.
The spice and concentrate industry, which accounts for 2.6% of the country’s GDP, also hailed the Government’s move.
Spices and Allied Products Producers’ and Traders Association (SAPPTA) President Christopher Fernando revealed that the tariff reduction by 30% for the sector directly addresses the high cost of energy – a key infrastructure challenge the industry grapples with.
He shared details of the sector’s energy consumption, which includes 1,755,560 kWh of electricity annually, and explained that the tariff cut would allow firms to survive on slim profit margins while remaining competitive.
“Our voice has been heard and we are truly grateful for this electricity tariff revision,” Fernando said, adding that the relief will enable firms to invest in infrastructure and boost export performances.
