Treasury settles Rs. 15 billion to CPC – The Morning

Date:

  • Payment made on behalf of CEB 

 By Yakuta Dawood 

As a relief mechanism amidst the ongoing power crisis, the Treasury on behalf of the Ceylon Electricity Board (CEB) has settled approximately Rs. 15 billion to the Ceylon Petroleum Corporation (CPC) during this week, The Sunday Morning Business learns. 

A senior official at the CEB, who wished to remain anonymous, speaking to The Sunday Morning Business revealed that the Treasury had paid the sum with the aim of supporting the CEB to purchase an uninterrupted fuel supply from the CPC, as the CEB did not have sufficient funds at its disposal. 

“The Treasury is supporting the purchase of fuel and the settlement of Rs. 15 billion to the CPC was made to procure fuel for the months of March and April,” the official said. 

The official asserted that the CEB was struggling to find money as the “receivable position has increased”. 

“We are not collecting money from customers now, but the crisis is due to the outstanding balance which we are yet to receive and the increased cost of production, which is higher than the revenue for units generated. Thus, we are short of revenue,” the CEB official added. 

Attempts to contact Treasury Secretary S.R. Attygalle, other officials from the Finance Ministry, and the CPC were futile.

In December, the CEB forecasted a loss of Rs. 100 billion in 2022 due to unfavourable macroeconomic conditions such as inflation, rupee depreciation, global coal price rises, maintenance fees, and other charges.

To overcome the present financial crisis, the CEB is desperately in need of a hike in electricity tariff rates, which have not been revised since 2014. Therefore, the CEB had recently submitted proposals to the Government to revise the current policy decision on tariff rates. 

“Since 2014, there has been no revision to tariff rates, but right now changes are essential. Once the Government grants approval, a decision to increase the price will be considered through different scenarios. For example, one alternative would be to increase the fixed amount and the lower block tariffs,” the official said. 

However, the Public Utilities Commission of Sri Lanka (PUCSL) on 26 February denied reports that the CEB had submitted a request to the regulator for an electricity tariff increase aimed at bridging the cost-income gap created when using thermal power generation.

Meanwhile, Power Minister Gamini Lokuge held a meeting on 28 February with representatives from the CEB, CPC, the Lanka Indian Oil Corporation (LIOC), and the Finance Ministry to discuss alternative sources through which the CEB could obtain fuel.

“We are looking for alternative solutions if the CPC cannot supply fuel to the CEB. The CPC should supply fuel to the CEB, but if it cannot do so, we need another programme in place,” Lokuge told the media.

The CEB carried out power-shedding over the last week due to the power crisis, with day-time power cuts imposed between 8 a.m. and 6 p.m. and night-time power cuts between 6 p.m. and 11 p.m.

 

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