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Electricity regulator contradicts Minister; tariff reduction certain

Published

2 years ago

2025/01/14

Sahan Weerasooriya

Dayasiri and Jayakody

…10% to 20% decrease on the cards

By Shamindra Ferdinando

The Energy Ministry couldn’t intervene in the electricity tariff revision as the exclusive authority to do so was vested with the Public Utilities Commission of Sri Lanka (PUCSL) in terms of the relevant Acts, authoritative sources told The Island.

Energy Minister Kumara Jayakody’s recent declaration in Parliament that tariff revision wouldn’t be implemented for a period of three years had no legal validity, sources said. Minister Jayakody said so in response to a query raised by SJB MP Dayasiri Jayasekera.

The PUCSL would make its position on the tariff revision known to the public on Friday (17), sources said, adding that available data indicated that tariffs could be reduced by 10% to 20%.

Earlier, the Ceylon Electricity Board (CEB) proposed to the PUCSL that tariff revision should be put on hold for six months, beginning January 2025. The PUCSL, appointed by President Anura Kumara Disanayake consists of Prof. K.P. Lalith Chandralal (Chairperson), Piyal Henanayake and Dr. Chathuri Samanmali Fernando.

In terms of the Public Utilities Commission of Sri Lanka Act No. 35 of 2002 and the Sri Lanka Electricity Act No. 20 of 2009, the PUCSL is the regulator, hence its authority couldn’t be challenged by the Minister.

Sources said that the PUCSL considered available data, assessment and information before deciding on tariff revision. The Energy Minister, or the Secretary to that Ministry, could have made representations to the PUC during recent public consultations, sources said, adding that several lawmakers appeared before the Commission recently.

The PUCSL couldn’t be deprived of its authority unless the NPP government amended both Acts, sources said.

Alleging that Minister Jayakody deceived the Parliament with regard to the tariff revision issue, Opposition MP Dayasiri Jayasekera told The Island that he would raise a privilege issue in the House. The issue here is whether the Minister is conversant with the Public Utilities Commission of Sri Lanka Act No. 35 of 2002 and the Sri Lanka Electricity Act No. 20 of 2009.

The Minister seemed to have ignored the fact that the Wickremesinghe-Rajapaksa government, in 2023, began introducing four tariff revisions annually. Before that, tariff revisions were effected twice a year.

The last revision was in July 2024 when the PUC reduced power tariffs by 22.5% against the backdrop of the CEB claiming that the maximum affordable was just 3%.

The CEB has requested that the PUCSL revert to the old system as four revisions a year seemed an unnecessary exercise.

We quoted SJB trade unionist Ananda Palitha in yesterday’s issue (13 January) of The Island that electricity tariffs could be reduced by as much as 35% as ,contrary to CEB’s claims, the state enterprise earned significant revenue gains, running into billions of Rupees.

Lawmaker Jayasekera pointed out that Minister Jayakody declared in Parliament that the NPP never promised an immediate electricity tariff revision. That declaration was contrary to President Anura Kumara Disanayake’s assurance, in the run up to the presidential election, that one third of the electricity bill would be reduced, along with the fuel price.

However, the electricity tariff revision was to be announced in October 2024, in line with the previous government’s decision to implement four revisions annually, the former Minister said.

Referring to revisions, both increases and reduction in electricity tariffs, sources pointed out that on every occasion, since 2022, the PUCSL had no option but to disagree with the CEB’s false assessments for obvious reasons. The CEB always proposed higher increases and low reductions in line with their overall strategy, sources said, emphasizing the responsibility on the part of the Ministry to engage the PUCSL.

The government must realise that the PUCSL is the economic, technical and safety regulator of the electricity industry, and the designated regulator for petroleum and water services industries as well. The PUCSL also has been assigned as the shadow regulator for the lubricant market in Sri Lanka.

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Fuel crunch looms

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19 hours ago

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Sahan Weerasooriya

Govt. tells fuel distributors to maintain stocks to ensure uninterrupted supplies

by Saman Indrajith and Norman Palihawadane

The government had instructed private fuel distributors to maintain minimum stocks and ensure uninterrupted supplies to the market, Energy Minister Anura Karunathilaka told Parliament yesterday (06).

Karunathilaka said the Ministry of Energy Secretary had notified the relevant companies of the requirement, following a reduction in supplies by some private distributors, amid higher international fuel prices.

The Minister said private companies had informed the government that they were facing losses because international prices had risen while fuel was being sold, locally, at prevailing prices. As a result, some companies had reduced the volumes released to the market.

The reduced supplies had increased the burden on the Ceylon Petroleum Corporation (CPC), whose share of the diesel market had risen from about 54% to 82%, the Minister said.

“The CPC currently holds an 82% share of the market,” he said, adding that it had increased its supplies, compared with February, to compensate for the reduction by private distributors.

Karunathilaka said the government could not, under the existing agreements with private companies, specify the quantities they should supply to individual filling stations. However, it could require them to maintain minimum stocks in the country.

The Minister said the Energy Ministry had already instructed companies that had failed to maintain the required stocks to take steps to prevent supply disruptions.

The Minister attributed the queues reported at some filling stations to reduced supplies from private distributors, as well as normal variations in fuel distribution. He also said demand for CPC fuel had increased because private companies generally did not provide fuel to dealers on credit, while the CPC offered a three-day credit facility.

“We expect that, as the Ceylon Petroleum Corporation takes on this additional burden, the problem will ease to some extent by Wednesday or Thursday,” Karunathilaka said.

He said instructions had also been issued to increase supplies to CPC filling stations. A special discussion on the issue is scheduled for today (07), with officials of the Energy Ministry and CPC expected to participate,

along with President Anura Kumara Dissanayake.

Meanwhile, Petroleum Dealers’ Association officials have called for an early solution to the supply issue. Association Chairman D.V. Shantha Silva said queues had been reported at many filling stations, mainly those operated by private distributors.

He said the situation was not due to an overall shortage of fuel, but was linked to reduced orders by Lanka IOC, Sinopec and R.M. Parks amid concerns over losses incurred on fuel sales.

The Ceylon Petroleum Private Tanker Owners Association has urged motorists to refrain from panic buying, saying there was no nationwide disruption to fuel supplies.

The government earlier increased fuel prices and introduced a per-litre diesel subsidy following concerns raised by distributors over rising international prices.