Tuesday, 7 October 2014 00:00
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Relief for commercial and industrial users of electricity to be delayed though domestic units get 25% reduction following Presidential announcement last month
By Shabiya Ali Ahlam
The commercial and industrial sector will continue to be in the dark as far as the recent Presidential announcement of a 25% cut in electricity tariff is concerned, with some speculating there will be no relief and others hinting at a longer wait.
Last month President Mahinda Rajapaksa announced an immediate reduction of 25% in electricity tariff during a speech at the commissioning of the Norochcholai additional coal plant with visiting Chinese President Xi Jinping.
The Public Utilities Commission last week announced the basis of the reduction to domestic users but remained silent over relief for industrial and commercial users.
“Industries may also get relief but it will come later; they will receive relief subsequently. We have only received a policy for reduction for domestic consumers. A reduction for industries will take time since the Treasury has to take into account subsides and other elements,” a PUCSL source told the Daily FT.
“Immediate relief is offered for the domestic consumers but a reduction for industries will take place in due course,” he added.
Whilst the relief for domestic users had received mixed reactions due to the basis adopted by PUCSL, industrial and commercial users are concerned there is no relief for them despite the Presidential decree.
Officials of the National Chamber of Commerce (NCCSL) and Ceylon Chamber of Commerce (CCC) noted the process remained ambiguous.
“There is no clarity as yet. We will wait for a few more days before contacting the PUCSL for this purpose since experience is that we should not ask too early. If we are getting a reduction it will be good, but if not, industries should aim to be more energy efficient,” NCCSL President Sunil G. Wijesinha said.
However, he cautioned that competitiveness would be negatively impacted if the reduction for domestic users is funded by imposing a higher tariff on industries.
CCC Secretary General and CEO Mangala Yapa noted the Chamber would get in touch with the PUCSL formally whilst some of its member association were already in discussion.
“We have not heard anything as yet and at the moment it is still unclear on what will be offered to the industry segment. We want to ensure that the rates given to us will be sustainable. The CCC will see how best the industry segment will benefit from this so its competitiveness could be increased,” Yapa added.
Sri Lanka’s private sector has been impacted by what is considered as one of the highest electricity tariffs in Asia, though the Government has been taking cover from the fact that reliable supply (unlike in several parts of South Asia) has a price.
However, with oil prices at new lows as well as additional generation via relatively cheaper coal power, the private sector is of the firm belief that tariffs can be significantly reduced.
Political analysts and trade unions have noted that the recent reduction in electricity tariff even for domestic users was unviable as both CEB and CPC losses and debt continue to rise.
