Government looks to implement IMF backed electricity pricing formula

Colombo (News 1st) -  Several months after Sri Lanka approved a pricing formula for fuel, the International Monetary Fund is now urging the Government to implement a similar pricing formula for electricity. Since the fuel price formula was introduced in Sri Lanka, the price of a litre of fuel has only increased and did not see any price reduction. The Ceylon Petroleum Corporation stated yesterday that the loss incurred by a liter of petrol is Rs. 12 and the loss incurred from the sale of a litre of diesel is Rs. 18. Yesterday in a statement, the IMF mission commended the successful implementation of the fuel pricing reform and encouraged the introduction of an automatic pricing mechanism for electricity. However, when News 1st inquired the public opinion on the matter, the review was quite negative. It was seen that many did not appreciate the fact that after the fuel price formula was implemented the fuel price kept rising and that the formula is not public knowledge. Energy consultant Dr. Tilak Siyambalapitiya spoke to News1st regarding the matter. He stated that even though the word out in the public is that the LNG power plants which are to be built in Keravalapitya and Hambantota are to be powered by gas, that it is not the case. He stated that they will be powered by fuel. Further, he noted that due to the increase the share of electricity produced by fuel, the price of electricity will have a significant impact. He went on to state that currently, "the national average price of electricity price is about Rs. 17 while the national average cost of electricity is about Rs. 23 and with the actions of the government, the electricity price will only go up and would never come down even in the next five years." Dr. Lalithasiri Gunaruwan a Senior Lecturer at the University of Colombo expressing his views on the IMF's call for an electricity price stated that if the government thinks they need a formula to calculate electricity prices then it shouldn't be a secretive pricing formula. Adding that a formula in determining tariffs for Sri Lanka should not be dictated by the IMF or the World Bank. Dr. Lalithsiri stated that if Sri Lanka keeps following the terms of IMF or the World Bank it is as good as "pawning the country's sovereignty to an international organization". Reporters questioned Minister of finance and Mass media Mangala Samaraweera on the matter. He stated that the government is not executing orders from the IMF. The Minister stated that the government has been considering the implementation of an electricity price deducing a formula for some time but decided against the matter. He then stated that the government is hoping to appoint a committee to look into the feasibility of implementing a new electricity formula but that it is not in accordance to IMF but as per the agenda of the Sri Lankan government. Minister Samaraweera noted that the fuel price may increase up to USD 81 and even though a formula for electricity is not enforced now, the global economy will eventually lead to it in 2 years time.