Energy Minister Kumara Jayakody has warned that electricity tariffs may have to be increased if the current dry weather conditions affecting the island persist. Speaking at a meeting in Matale, the Minister explained that the financial burden on the Ceylon Electricity Board (CEB) is growing, and adjustments may become necessary.
“Electricity tariffs were reduced by 20%, but if costs continue to rise, we may be forced to increase them again. This is not about making profits or savings—it is about covering operational costs. The Electricity Board often claims it makes a profit of 140 billion rupees, but that is misleading,” Jayakody stated.
He further explained that CEB does not generate actual profits but rather a temporary surplus due to quarterly price adjustments. “The Board assesses the previous six months and forecasts the next six months based on that. Any surplus is then absorbed into operational costs, leaving no profit by the end of the year.”
According to the Minister, last year’s projected surplus of 140 billion rupees was used to cover expenses, leaving only 46 billion rupees available. However, with the increasing costs of electricity generation and declining hydropower production due to drought conditions, the sector is now facing losses of around 42 billion rupees.
“If this trend continues, the losses could increase even further,” Jayakody warned, highlighting the urgent need for policy adjustments to ensure the financial sustainability of the energy sector.
