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Tariff shock looms as coal crisis drives Rs. 40 bn cost surge

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Sri Lanka’s power sector is bracing for a steep electricity tariff hike, with senior officials confirming that a revised proposal seeks an additional 53% increase, just weeks after the last revision took effect on 01 April.

The move follows a deepening cost crisis, triggered by substandard coal imports and ongoing fossil fuel supply constraints, which, officials say, have already imposed a burden exceeding Rs. 20 billion for the April–June period.

“The numbers are alarming. This is not a marginal adjustment but a structural cost shock,” a senior energy sector official told The Island. “The tariff filing reflects a requirement of around Rs. 40 billion, and roughly half of that is directly linked to the coal issue.”

According to internal estimates, coal-based generation has dropped by nearly 250 gigawatt-hours (GWh) during the three-month period due to poor-quality fuel, forcing greater reliance on costly diesel generation.

“Replacing that lost capacity with diesel costs in the region of Rs. 25 billion,” another official said. “Even after accounting for about Rs. 4.5 billion in reduced generation costs, the net additional burden exceeds Rs. 20 billion.”

The National System Operator (NSO) has projected a total additional cost of approximately Rs. 42 billion for the quarter, forming the basis of the latest tariff application now under review.

Former Energy Minister Eng. Patali Champika Ranawaka also weighed in, warning against transferring the burden to consumers.

“To increase tariffs by Rs. 41 billion under these circumstances is deeply concerning. Around Rs. 20 billion of that is due to the coal issue,” Ranawaka said.

He urged the Public Utilities Commission of Sri Lanka not to approve measures that would pass inefficiencies and losses directly onto the public.

Ranawaka called on the government to take firm action against those responsible instead of deflecting accountability. “The focus must be on accountability and recovery, not on shifting blame or burdening the people,” he said, in an apparent reference to past attempts to attribute power sector failures to external or trivial causes.

Officials acknowledged that the proposed increase, if approved, would place additional strain on households and businesses already grappling with high living costs.

“What is particularly concerning is the contradiction between assurances and actual filings,” a senior official noted, referring to earlier claims that losses from the coal issue would not be passed on to consumers. “The tariff submission clearly suggests otherwise.”

The crisis is expected to intensify in the coming months. Diesel prices are likely to rise, further escalating generation costs, while high-priced heavy fuel oil (HFO) shipments expected from April will add to overall expenditure.

“These pressures are cumulative,” an official said. “The system has very limited capacity to absorb them without tariff adjustments.”

Questions have also been raised about the feasibility of recovering losses from the coal supplier. Officials pointed out that the estimated financial damage is nearly equivalent to the total invoiced value of the first 11 coal shipments—around Rs. 21 billion—making full recovery unlikely.

Energy analysts warn that the financial impact could extend beyond June, as the affected coal stocks are expected to remain in use until at least August, prolonging inefficiencies and elevated costs.

The unfolding situation has intensified calls for transparency and accountability in the energy sector, with growing concern that consumers may ultimately bear the cost of systemic failures.

“This is about the credibility of the system,” a senior official said. “Without accountability, these crises will continue—and the public will keep paying the price.”

By Ifham Nizam



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The use of local organic Agricultural products in the Bakery Industry will strengthen both local farmers and the tourism industry – PM

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Prime Minister Dr. Harini Amarasuriya stated that the use of local organic agricultural products in bakery production would provide significant support to both local farmers and the growth of the tourism industry.

The Prime Minister made these remarks while addressing the Annual meeting of the All Ceylon Bakery Owners’ Association, held at the Shangri-La Hotel, Colombo, on Friday (12 June).

The Prime Minister  stated,

“At a decisive moment when the country is moving towards a new phase of economic transformation, I believe that the bakery industry has the potential to become a key driver of the national economy, rather than remaining limited to flour-based products alone.

The food production must be mainly considered the quality and safety of food. Therefore, instead of focusing solely on taste, we should introduce nutritious and healthy products to the market that are free from artificial flavourings and colourings.

By using ingredients such as rice flour, finger millet, foxtail millet, green gram, and indigenous tubers to create value-added products, the bakery industry has the opportunity to capitalize on the growing global trend towards health-conscious diets.

The use of local organic agricultural products in food prepared for foreign tourists will provide substantial benefits to local farmers while also contributing to the growth of the tourism industry. At the same time, the government remains committed to strengthening local entrepreneurs by reducing challenges related to the importation of raw materials, providing concessionary loans for new technologies, and offering the technical assistance required to meet international standards.

The government has already launched programmes through the Ministry of Industries to provide the necessary training and market linkages to help small and medium-scale bakery owners develop and expand their businesses”.

The occasion was attended by the Deputy Minister of Industries Chathuranga Abeysinghe, President of the All Ceylon Bakery Owners’ Association N.K. Jayawardana, and a number of members of the Association were also present at the event.

Prime Minister’s Media Division

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Prime Minister meets with UNICEF delegation

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Prime Minister Dr. Harini Amarasuriya met with a delegation from the UNICEF on Friday (June 12) at Temple Trees to discuss ongoing efforts to support the recovery of the education sector following the impact of Cyclone Ditwah.

Discussions focused on the implementation of activities outlined in the report titled “Cyclone Ditwah Education Emergency Response Plan: Phase 1 Progress Updates (January–April 2026).” The meeting provided an opportunity to review the progress achieved during the initial phase of the response and to discuss future interventions aimed at supporting children and schools affected by the disaster.

The Prime Minister and the UNICEF delegation also exchanged views on strengthening collaboration to ensure the continuity of education and the well-being of affected children.

The UNICEF delegation included Emma Brigham, UNICEF Representative, Begona Arellano, Deputy Representative, and other UNICEF officials.

(Prime Minister’s Media Division)

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Switzerland to vote on plan to cap population at 10 million

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A yes-vote poster paints the planned cap (L) as a way of protecting Switzerland, but opponents call it a "chaos initiative"[BBC]

Can a country put a fixed limit on its population? That is the question Switzerland will be answering on Sunday when voters go the polls to decide on a proposal to cap their population at 10 million, a move that has exposed divisions about immigration in the Alpine nation.

The move is backed by the right-wing Swiss People’s Party, which describes it as a “sustainability initiative” aimed at easing pressure on housing, public services and the environment. However some voters see this as the party’s latest anti-immigration move.

Dubbing it a “chaos initiative”, the government, other political parties, business leaders and trade unions argue it will deprive hospitals and hotels of much needed staff, and damage hard-won relations with the European Union, leaving non-EU member Switzerland isolated in a very risky world.

Switzerland’s population has grown rapidly since 2002, when it stood at 7.3 million. Now it is 9.1 million, 27% of whom are Swiss residents who were born abroad.

Switzerland’s system of direct democracy means all major decisions are taken via the ballot box. Campaigners simply have to gather 100,000 signatures to ensure a nationwide vote.

Many voters are concerned by overcrowded trains, expensive apartments and rising health costs.

The latest opinion polls indicate this could be a very close vote.

They suggest voters are inching towards a no vote by a wafer thin margin, with 52% opposed – but polls remain divided, with 45% saying they are in favour of the proposal and a significant number of voters still undecided.

[BBC]

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