The Sri Lankan government took a decision with immediate effect yesterday in an attempt to receive funding from the International Monetary Fund to boost the economy. There was strong discontent among citizens and industry associations. From one day to the next, food prices increased by 10%.
Colombo () – Yesterday the Ceylon Electricity Board (CEB) of Sri Lanka raised electricity prices by 66% with immediate effect, a measure with which the government hopes to convince the International Monetary Fund (IMF) to grant it a loan to save the economy, in crisis for about a year.
The decision, which did not even spare the clothing industry, the sector with the largest exports, generated a wave of protests throughout the country. Last month, 6.9 million signatures had been collected against the increase in the price of electricity, the third opposition attempt in five months, after the government already raised prices by 75% last year.
At the same time, discontent and economic difficulties are growing among citizens, who are already enduring an inflation rate of more than 54% in January and income taxes of up to 36%. Since last year, Sri Lanka had imposed sporadic power outages of up to 13 hours a day. However, with the tariffs increasing, the government promised that no more will be done.
Janaka Ratnayake, Chairman of the Public Utilities Commission of Sri Lanka (PUCSL), announced that he will take legal action against the executive: “I will go alone on behalf of all citizens,” he declared yesterday, adding that a majority of 115 MPs could remove him as president of the commission that manages public services.
Economic analysts Nimeshi Attanayaka and Sandeepa Dickwella explained to that the increase in rates was decided to compensate for the concessions granted to the CEB, but “it will be unsustainable for the average consumer, turning electricity into a luxury.” Therefore, the experts continue, “instead of increasing bills, it would be necessary to restructure the CEB, which currently employs 27,000 people, while most of the work, such as maintenance of power lines, is outsourced.”
At a press conference, Energy Minister Kanchana Wijesekera stated that the increases would generate a profit of Rs 288 billion, which he said would not be used to offset CEB’s losses, but to cover operating expenses.
According to the Joint Apparel Association Forum, an association that brings together the clothing industries, members are alarmed by the impact of the increase in electricity rates in the sector and declared that “the rate proposed by the CEB is based on an overestimation of the demand , which in turn leads to imposing unnecessarily high tariffs on consumers. Sri Lanka needs justified and competitive tariffs compared to its main competitors.”
Deputy Patali Champika Ranawaka, an electrical engineer and former Minister of Energy and Electricity, lashed out at the rate hike. He stated that “with the increase in electricity, people have no choice but to protest” and noted that “the governments of former presidents Gotabaya Rajapaksa and Chandrika Bandaranaike collapsed due to an energy crisis, so the current government should avoid a similar situation. The CEB considers itself one of the largest loss-making entities due to waste and corruption.”
Meanwhile, all foods increased 10% between yesterday and today. Asela Sampath of the All Island Canteen Owners Association, which represents the catering industry frequented by low- and middle-income Sri Lankans, said: “We can’t afford these costs anymore so we have no choice but to raise prices because We use electricity for cooking and baking.” Since yesterday, sales of bakery items, including those sold from mobile vans, have fallen sharply.
The owners of the small bread trucks (called choon paan) commented that “even during the pandemic lockdowns we did not experience this type of situation.”
“Now there is no way to use the appliances we bought,” he told Kamani Karunathilake, mother of three children. “If you turn on an appliance at the end of the month you get a very high bill, so now we live with a single light or with the light of a candle.”
(Melani Manel Perera contributed)
