The subsidy deception hurts the poor most - who consume the least amount of energy -by destroying the real value of their salaries and meager bank deposits though currency depreciation and inflation.
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In 2004 market pricing of energy was abandoned under pressure from the Janatha Vimukthi Peramuna and the Sri Lanka Freedom Party two influential factions of the elected ruling class, ending three years of low inflation and currency stability.
Subsequent energy subsidies and triggered several episodes of balance of payments pressure and also led to a losses through petroleum subsidies.
In 2012, after the latest balance of payments crisis, energy and petroleum prices were raised amid stiff opposition by the United National Party, the second largest faction of the elected ruling class which had brought in energy market pricing and low inflation after a balance of payments crisis in 2000.
SOE's are able to run persistent large losses because state banks which under the control of the elec