Business

Electricity tariff hike raises questions over fuel pricing transparency

Published

5 months ago

2026/05/8

Electricity power lines in Sri Lanka’s countryside. (File photo

The much discussed latest electricity tariff debate has taken a controversial turn, with senior power sector officials and independent energy analysts questioning whether opaque fuel pricing mechanisms are artificially inflating the cost of electricity generation while shielding politically sensitive petroleum losses.

At the centre of the controversy is the widening gap between diesel pricing and the steep increases imposed on Heavy Fuel Oil (HFO) and naphtha — two fuels heavily used by the Ceylon Electricity Board (CEB)⁠� for thermal power generation.

Energy analysts argue that while electricity tariffs are officially calculated on a “cost reflective” basis, the fuel pricing structure feeding into those calculations appears far from transparent.

A senior CEB official told The Island Financial Review that the present fuel pricing pattern raises “serious economic and policy concerns.”

“The entire electricity tariff framework is built on the assumption that fuel supplied to the power sector reflects actual import costs. But if fuel pricing itself is distorted, then tariff calculations become distorted too,” the official said.

According to CEB operational data reviewed by sector analysts, the utility regularly consumes nearly two-and-a-half times more HFO than diesel for thermal generation. Yet recent fuel revisions saw diesel prices rise only marginally — despite allegations that diesel cargoes had been procured at extraordinarily high dollar values.

Industry analysts pointed out that diesel imported at around USD 286 per barrel resulted in only about a Rs. 10 domestic price increase, while HFO prices surged by nearly Rs. 42 per litre and naphtha by around Rs. 34 — increases estimated at roughly 25 percent.

“This creates the impression that losses on diesel are being absorbed by overpricing HFO and naphtha,” an energy economist said.

“If CPC is maintaining artificially low diesel prices for political or inflation management reasons, the burden appears to be transferred to electricity consumers through thermal generation costs.”

The analyst noted that because the CEB relies heavily on HFO for regular dispatch operations, even relatively small increases in HFO pricing can translate into billions of rupees in additional annual generation costs.

In dollar terms, the implications are substantial.

Power sector officials estimate that every major upward revision in HFO pricing adds several billion rupees to annual generation expenditure, particularly during periods of low hydro availability. Given the depreciation pressures on the rupee and the dollar-denominated nature of fuel imports, the resulting tariff burden on consumers becomes even more severe.

A second senior CEB official expressed concern that institutional checks and balances within the energy sector appeared to be weakening.

“There is growing concern within the industry that the electricity sector regulator is no longer functioning with the level of independence expected of it,” the official said, referring to the Public Utilities Commission of Sri Lanka (PUCSL)⁠.

“The regulator’s responsibility is to independently scrutinise cost submissions, fuel assumptions and tariff calculations. But many in the sector now feel there is inadequate challenge or verification of the numbers being presented.”

The official warned that if regulatory independence is perceived to be compromised, public confidence in tariff revisions could deteriorate further.

A senior engineer attached to the CEB said the issue goes beyond tariff formulas.

“What is missing is cost transparency. There is no publicly accessible breakdown showing actual landed fuel costs, financing charges, hedging exposure, exchange losses, or refinery margins. Without that, nobody can independently verify whether the fuel pricing is truly cost reflective.”

Analysts also questioned the apparent disparity between crude oil acquisition costs and refined fuel pricing adjustments.

“If crude was purchased at almost the same price range, why are HFO and naphtha seeing disproportionate hikes while diesel remains comparatively protected?” one analyst asked.

Several observers believe the answer may lie in broader political and financial calculations.

Keeping diesel prices artificially low helps contain inflationary pressure across transport, logistics and food supply chains. However, critics say it may also help suppress scrutiny over controversial diesel procurements carried out at elevated international prices.

Energy sector sources further alleged that maintaining a lower diesel benchmark may also indirectly soften calculations linked to the long-running coal procurement controversy, where comparative generation cost modelling often references diesel-based thermal pricing.

“This has major political implications because lower diesel benchmarks can influence public perception regarding coal generation economics,” an analyst said.

By Ifham Nizam

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Business

PM ‘Rings the Bell’ at CSE to champion financial literacy and investor education

Published

19 hours ago

2026/10/7

Sahan Weerasooriya

P.M. Dr.Harini Amarasuriya

As part of World Investor Week (WIW) 2026, the Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) joined stock exchanges around the world in ringing the market opening bell for financial literacy on 5 October 2026, under the patronage of Dr. Harini Amarasuriya, Prime Minister of the Democratic Socialist Republic of Sri Lanka.

World Investor Week is an annual global campaign led by the International Organization of Securities Commissions (IOSCO) to raise awareness of the importance of investor education and investor protection. The “Ring the Bell for Financial Literacy” initiative, pioneered by the World Federation of Exchanges (WFE), brings together stock exchanges and other stakeholders worldwide to promote greater financial literacy and encourage individuals to make informed financial decisions.

The ceremony also marked the 40th anniversary of the CSE and the joint launch by the SEC and the CSE of the Stock Market Game, an online stock market simulation based on the ATrad trading system.

The Stock Market Game enables participants to gain practical experience of how the stock market works, make investment decisions and construct portfolios of listed shares without using real money. The platform is accessible through the websites of the SEC and CSE and is expected to serve as an important practical tool for promoting financial education. It is envisaged that the Stock Market Game will also be used to conduct simulation competitions among universities and the 100 Capital Market Clubs established in schools across the country.

The ceremony also featured the commemorative issuance of a stamp and First Day Cover to mark the 40th anniversary of the CSE. Issued in collaboration with the Department of Posts and the Philatelic Bureau of Sri Lanka, the commemorative stamp and First Day Cover were presented to Prime Minister Dr. Harini Amarasuriya, by the SEC Chairman Snr. Prof. D.B.P.H. Dissabandara and Ray Abeywardena, Director CSE and Chairman of Central Depository Systems (CDS).

Welcoming the gathering, Rajeeva Bandaranaike, Chief Executive Officer of the CSE, highlighted the importance of obtaining reliable information when making investment decisions.

“We operate in a digital world where a vast amount of information and data is disseminated through social media. While some of this information is factual, some may be inaccurate or misleading. When investing in the stock market, it is essential to make informed and prudent investment decisions. Therefore, investors should obtain information and data from reliable and responsible sources and persons before making investment decisions.”

Addressing the gathering, SEC Chairman Snr. Prof. D.B.P.H. Dissabandara emphasised that the SEC’s role extends beyond regulation to facilitating the further development of the capital market.

“The SEC needs to determine how best to introduce the stock market to Generation Alpha, Generation Beta and generations beyond. When it comes to investors, we need to build confidence in the market, because people will invest only when they have confidence in the market.’’

Business

Rs. 5 million worth of prizes to be given at 8th edition of CSE Masterminds Quiz Competition

Published

19 hours ago

2026/10/7

Sahan Weerasooriya

The Colombo Stock Exchange (CSE) has announced that the eighth edition of the CSE Masterminds Quiz will be held on 9th October 2026, from 3.00 p.m. onwards, at the Main Ballroom, Shangri-La Colombo.

Recognised as Sri Lanka’s premier capital market quiz competition, CSE Masterminds brings together teams from the public and private sectors. Participants will be tested across international business, global markets, current affairs, the Sri Lankan economy and business, the Sri Lankan stock market, and sports and entertainment, before a concluding rapid-fire round.

This year the winning team can win up to Rs. 2,000,000, the runners-up up to Rs. 1,000,000, and the second runners-up Rs. 750,000. Sector awards will also be presented to the highest-performing team from each participating sector. Guest participants will also be able to compete in rounds of Audience questions, and will have the opportunity to participate a raffle draw for three free return tickets provided by Fits Aviation (Pvt) Ltd.

The evening will also include an exclusive after-party with live music provided by the band ‘Doctor’ featuring guest performer Umara Sinhawansa, fine food and beverages, providing an opportunity for networking and celebration. Every participant will receive a premium goodie bag made possible by the support of the event’s sponsorship partners. Collectively, the event will feature over Rs. 5 million worth of prizes, rewards, and giveaways, encompassing championship prizes, sector awards, audience engagement prizes, raffle draw offerings, and goodie bags.

Sponsorship partners include:

Platinum Sponsors: Hatton National Bank PLC and Bartleet Religare Stockbrokers (Pvt) Ltd.

Gold Sponsors: Ex-Pack Corrugated Cartons PLC, Asha Securities Ltd., and Lanka Securities (Pvt) Ltd.

Silver Sponsors: Barista Coffee Lanka (Pvt) Ltd., Capital Trust Holdings (Pvt) Ltd., LOLC Holdings PLC, Arpico Ataraxia Asset Management (Pvt) Ltd., IronOne Technologies (Pvt) Ltd., and LankaPay (Pvt) Ltd.

Co-Sponsors: Access Engineering PLC, Bank of Ceylon, Commercial Bank of Ceylon PLC, CryptoGen (Pvt) Ltd., Deloitte Lanka (Private) Limited, Dialog Finance PLC, Efutures (Pvt) Ltd., People’s Leasing & Finance PLC, Senfin Asset Management (Pvt) Ltd., and Softlogic Stockbrokers (Pvt) Ltd.

Business

NCCSL to conduct practical workshop on food labelling and advertising regulations in Sri Lanka

Published

19 hours ago

2026/10/7

Sahan Weerasooriya

The National Chamber of Commerce of Sri Lanka (NCCSL) is organizing a one-day practical workshop on “Food Labelling & Advertising Regulations in Sri Lanka” on Thursday, 8th October 2026 from 9.00 a.m. to 4.30 p.m. at the National Chamber of Commerce, Colombo 10. The workshop has been organised to provide a practical understanding of the latest regulatory requirements governing the food products labelling and advertising of food products in Sri Lanka, with particular attention to regulatory developments applicable in 2026, compliance requirements, and the potential legal and financial implications of non-compliance.

As food products increasingly compete not only with quality and price but also on packaging, labelling and promotional claims, businesses must ensure the information they communicate to consumers is accurate, transparent and consistent with applicable regulatory requirements. Understanding these requirements is therefore essential for businesses seeking to protect their brands, maintain consumer confidence, and minimize regulatory and legal risks.

The practical workshop will go beyond an overview of regulations and focus on how businesses can apply regulatory requirements in their day-to-day operations. Participants will be guided through key areas of food regulatory compliance, including the national food regulatory framework, recent food labelling regulations and key changes, mandatory approvals and prohibitions relating to food labelling, and the litigation process associated with regulatory violations. The programme will also cover several areas of growing importance to the food industry, including the EU EMPCO Directive, food colour coding regulations, regulations relating to food trans-fatty acids and the importance of compliance in the use of food additives. Practical exercises will further enable participants to apply their knowledge to real-world compliance situations and strengthen their ability to identify potential regulatory concerns.

For further information and registration, please contact the National Chamber of Commerce of Sri Lanka on 011 4741788 – Nethmi or Udula – 071 403 4775.