Sri Lanka power costs to rise 30-pct to plug Rs42bn hole

Feb 06, 2008 (LBO) – Sri Lanka's power ministry is backing a proposal by the state-run Ceylon Electricity Board (CEB) to raise tariffs by around 30 percent to avoid a projected loss of more than 42 billion rupees in 2008. "The suggestion is something like 25 percent and there will be a fuel adjustment rate," power minister John Seneviratne said in a interview with ETV's Lanka Business Report show.

There will also be a 20 percent fuel surcharge on the total bill, except for low income households.

The combined tariff and surcharge will increase electricity prices by around 30 percent and could be applicable from next month.

The government has been resisting a price increase because of the possible political fallout despite the CEB’s chronic financial problems from selling power below cost.

New electricity tariff proposals are before a cabinet appointed subcommittee on controlling the cost of living headed by Sri Lanka's prime minister which is expected to make a decision this month.

Sri Lankan electricity tariffs, which are some of the highest in Asia, are grouped in three categories, domestic, industrial and commercial.

Seneviratne says industrial and domestic sector tariffs will see t