Sri Lanka to increase electricity tariffs by as much as 18pc as energy costs surge due to the Middle East conflict.

COLOMBO, May 10 — Sri Lanka will raise electricity tariffs by up to 18 per cent starting Monday to cover higher power generation costs linked to increased reliance on thermal plants amid the ongoing conflict in the Middle East.

According to the Public Utilities Commission, only consumers using more than 180 kilowatt hours of electricity per month will be affected by the increase, while households consuming less than that threshold will see no change in their bills.

The higher rates will apply to industries, hotels, businesses, government agencies and places of worship that exceed the 180-unit monthly usage mark, the commission said in a statement.

The latest adjustment follows a 40 per cent tariff hike introduced last month and forms part of a broader set of measures adopted by the island nation in response to the impact of the Middle East conflict on energy supplies.

Sri Lanka has also increased fuel prices by more than 35 per cent and introduced rationing due to supply disruptions.

Rising energy costs have driven inflation to 5.4 per cent in April, more than double previous levels, according to official figures.

The country is gradually recovering from its 2022 economic crisis, when it exhausted its foreign exchange reserves and was unable to pay for essential imports such as food, fuel and medicine.

Recovery efforts were further hampered by a cyclone last year that claimed at least 643 lives and affected more than 10 per cent of the population of 22 million.

The World Bank estimated the storm caused US$4.1 billion in direct damage to infrastructure and agriculture.

Sri Lanka has been working to stabilise its economy under a US$2.9 billion bailout programme agreed with the International Monetary Fund in early 2023, but elevated energy prices continue to pose a major obstacle to its recovery. — AFP