(Colombo, Sri Lanka) — Sri Lanka’s power regulator has approved surcharges of between 15 to 40 percent on the bills of power users to recover a part of the cost of a steep fuel price increase, an official said.

Household customers using less than 30 units have to pay a 25 percent ‘fuel surcharge’, those using between 31 to 60 units 35 percent and those using over 60 units 40 percent, Jayatissa de Costa, chairman of the Public Utilities Commission of Sri Lanka said.

General purpose business customers have charged an extra 25 percent ‘fuel surcharge’, industry 15 percent and hotels, the sector that is going through a boom and making the most profits also only 15 percent.

PUCSL director general Damitha Kumarasinghe said the surcharges will apply only to the tariffs on units of power and fixed fees and peak usage (kVA charge) will be excluded when calculating the fuel surcharge.

The CEB, and Lanka Electric Company, the island’s second power distributor, will collect the surcharge from February 16.  State schools, hospitals and religious institutions would not have to pay the fuel surcharge.

De Costa said the highly profitable hotel sector was charged a low 15 percent surcharge on a government directive.

He also defended high fees on large householders – some of whom critics have said are already paying above cost tariffs – saying there were only a few such customers.

Sri Lanka’s state run Ceylon Petroleum Corporation last week jacked up petroleum product prices including diesel and furnace oil by between 30 to 40 percent as credit taken by the power utilities worsened pressure on the exchange rate.

The rupee has fallen from 110 to around 120 rupees in the past three months.

Sri Lanka does not have an automatic pricing formula to adjust fuel prices which helps keep the economy and exchange rate stable.

State run Ceylon Electricity Board still received some fuels below market price, PUCSL officials said.

PUCSL was supposed to have increased power prices twice over the last six months but prices were kept down on political directions.  PUCSL said it will take over petroleum price regulation also soon.

Ad hoc state intervention of energy prices have long been a factor in balance of payments crises in the country.

by Lanka Business Online (LBO)