Central Bank Governor Dr. Nandalal Weerasinghe has emphasized that increasing electricity and fuel prices to match actual costs is essential for the health of Sri Lanka’s economy especially when state-owned enterprises like the Ceylon Electricity Board (CEB) and the Ceylon Petroleum Corporation are running at a loss.
Speaking at a media briefing held to discuss the country’s policy interest rate, Dr. Weerasinghe made it clear that maintaining artificially low prices would only shift the financial burden onto the public through higher taxes. “If electricity and fuel are not priced in line with their real cost, taxpayers will eventually bear the loss,” he stated. “When losses accumulate, the government has to step in with relief funds money that comes from the people through increased taxes.”
Dr. Weerasinghe underscored that the country has already agreed, in principle, to adopt a cost-reflective pricing model a key pillar of its financial reform agenda backed by the International Monetary Fund (IMF). He pointed out that the IMF has determined that Sri Lanka’s current electricity tariffs are insufficient to cover the true cost of generation and supply.
“There is agreement on both sides—the government and the IMF that adjustments are necessary,” the Governor said. “We must implement a pricing structure that reflects actual costs. That’s the only way to break the cycle of losses and bailouts.”
He noted that resolving this issue requires coordinated efforts from the Ministry of Energy, the Public Utilities Commission of Sri Lanka (PUCSL), and the Ceylon Electricity Board. These institutions must work together to restructure tariffs in a way that reflects economic realities while ensuring long-term financial sustainability.
The Governor’s remarks reinforce the government’s broader commitment to market-based reforms and fiscal discipline, following a series of economic challenges and bailouts that have strained public finances.
As inflation slows and fiscal policy stabilizes, Weerasinghe made it clear that Sri Lanka cannot afford to keep subsidizing losses at the expense of the taxpayer. “Cost-effective pricing isn’t just about utility bills, it’s about protecting the future of the economy.”
