Sri Lanka on Monday increased electricity tariffs for most households by 7.2% and for industries by 8.7% as the country faces rising energy costs linked to the ongoing conflict involving Iran. The move was announced by the country’s power regulator in Colombo.
The tariff adjustment forms part of Sri Lanka’s $2.9 billion program with the International Monetary Fund (IMF) agreed in 2023 to support the island nation’s recovery from a deep financial crisis.
Under the deal, the government is required to implement cost-reflective energy pricing several times each year to maintain the financial stability of the state-run Ceylon Electricity Board (CEB).
Hotels, which are closely tied to Sri Lanka’s key tourism sector, will face a 9.9% rise in electricity costs, while poorer households will see smaller increases ranging between 4.3% and 6.9%.
Public Utilities Commission Chairman Prof. K.P.L. Chandralal said further tariff revisions could be considered if global energy prices climb further due to the war.
The CEB had initially proposed a steeper increase of 13.56% to address a revenue shortfall of 15.8 billion rupees ($52.6 million), but regulators approved a smaller rise effective from the start of April.
The government has already introduced several emergency measures to manage energy shortages, including declaring Wednesdays public holidays, implementing fuel rationing and raising fuel pump prices by around 35% earlier this month.
Sri Lanka is also negotiating with Russia, India and the United States to secure stable fuel supplies, while allocating about $600 million to purchase refined fuel for April.
Officials say the country is struggling to secure about 90,000 metric tons of crude oil required to keep its only refinery operating and to produce sufficient furnace oil for thermal power plants.