ECONOMYNEXT – Sri Lanka’s Ceylon Electricity Board is selling power to 5 million, or 70 percent of customers, at a loss, compared to generation cost, Energy Minister Kumara Jayakody said indicating that other customers are ‘taxed’ to run the utility at break-even cost.
The average cost at point of generation has been brought down to 19.20 rupees, he said.
“The selling price for households that use 30 units or less was 4.50 rupees (down from 8 rupees in 2024 July),” Minister Jayakody told parliament during the budget debate on his ministry.
“The selling price up to 60 units was 8 rupees, down from 20. The selling price of up to 60 units was 25 rupees but this has been reduced to 12.75. The selling price up to 61 to 90 domestic was 30 and now is 18.50.”
“This means when it costs us 19.20 to generate, we are giving electricity to 5 million, or 70 percent of customers, at a loss.”
“From units 91 to 120 it was 50 rupees earlier and we charge 24 now. From 121 to 180 what was 50 rupees we charge 41 now.
“For over 180 units, what was 75 rupees is now 61 rupees.”
A charge of 61 rupees means middle class households are being charged 317 percent of cost of generation for unit, observers say.
Instead money being paid to the CEB through allocations to Aswesuma or similar transparent ways, other houses are being charged an extraordinary ‘hidden tax’ by the regulator and the utility for political purposes, critics say.
However that involuntary charge made from households as a coercive cross-subsidy, is not totaled up as a tax paid or counted as part of the tax to GDP ratio.
Sri Lanka’s power regulator has been given extensive discretion through law and the pricing methodology, to mis-price electricity leading to both middle class households and services exporters being hit by discriminatory tariffs far above cost.
The budget for 2026 has now proposed subsidies to for data storage.
Meanwhile religious institutions are are also getting rock bottom rates, from 4.50 rupees. The highest rate is only 26 rupees.
Middle class households which cannot afford the capital cost of solar energy are the hardest hit from discriminatory pricing. Even those that can afford have to make the investment in the panels.
Users are also charged a fixed fee, which can go towards maintaining transmission and distribution infrastructure.
With more renewable power being accommodated, large investments are being made to the grid. (Colombo/Nov22/2025)