The Energy Ministry is preparing to introduce a new electricity tariff formula under which rates will be revised only once a year.
According to a senior Energy Ministry official, the proposed formula is expected to benefit both domestic and industrial consumers, as tariffs would no longer be adjusted every three months under the current pricing structure.
Discussions between officials of the Energy Ministry and the Finance Ministry are currently underway to finalise the new formula.
The official explained that the proposed pricing mechanism would take seasonal weather patterns into account when determining tariffs.
“The first few months of the year are generally quite dry, while heavy rainfall is experienced towards the end of the year. Under the existing system, electricity tariffs increase during the dry season and decrease during the rainy season,” the official said.
Under the proposed system, tariffs would be revised only once at the beginning of the year. As a result, the Ceylon Electricity Board (CEB) may operate at a financial loss during the first six months of the year, but this could be offset during the latter half of the year, the official noted.
He added that consumers would also benefit, as a single annual tariff revision would allow them to plan their expenses more effectively.
The official further stated that similar pricing formulas have been successfully implemented in other countries.
He said the proposed mechanism would have a comparatively lower impact on the cost of living, as the prices of many goods and services often fluctuate in line with electricity tariff revisions.
“This way, there will not be significant price changes within a short period, as seen under the current tariff formula,” he said.
Once finalised, the new tariff formula will be submitted to the Public Utilities Commission of Sri Lanka (PUCSL), the power sector regulator, for approval.
