A 15% hike in electricity tariffs has sparked serious alarm across Sri Lanka’s tea industry, with fears that rising production costs could cripple exports and endanger the livelihoods of over two million people.
Dhanesh Devanayagam, former President of the Tea Exporters Association, warned that the industry already navigating stiff competition from India and Kenya is now facing an unprecedented challenge. “This tariff increase directly impacts our production expenses,” he said. “We are no longer able to compete on price.”
Devanayagam questioned the rationale behind the increase, especially at a time when the Sri Lankan rupee has strengthened, thereby lowering the cost of fuel and coal imports. He also pointed out that hydroelectric generation remains inexpensive, yet the tariff hike disregards this cost advantage.
“This move is hard to understand,” he added. “Why are we raising tariffs when our input costs are decreasing?”
Sri Lanka’s tea industry, a cornerstone of the nation’s export economy, supports around two million people, from estate workers to smallholder farmers and exporters. Devanayagam warned that if the rising electricity costs are not urgently reviewed, these individuals may face severe economic hardship.
“This isn’t just about an industry it’s about families, communities, and the backbone of our rural economy,” he said.
He urged authorities to reconsider the timing and necessity of the tariff increase, warning that if no action is taken, the consequences could be devastating for the country’s most iconic export sector.
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