ECONOMYNEXT – Sri Lanka’s foreign exchange shortages coming from a soft-pegged monetary arrangement has begun to hit the electricity sector, with state-run Ceylon Electricity Board being with the petroleum utility unable to supply fuel on credit any more, a report said.
State-run Ceylon Petroleum Corporation has borrowed dollars from state banks and also got suppliers credit to import fuel.
Sri Lanka’s banks have also tightened the opening of Letters of Credit, amid forex shortages.
The CEB tends to also run losses and delay payments to the Ceylon Petroleum Corporation as power prices are not revised every six months as envisaged after a currency crisis in 2001, and costs are generally high as the utility has been barred from expanding its coal plants.
The CPC has requested 18 billion rupees in arrears for fuel to be settled General Manager of the Ceylon Electricity Board told Sri Lanka’s Sirsasa Television.
The report quoted CPC Chairman Sumith Wijesinghe as saying that CEB owed it 91 billion rupees.
Given the current problems the CPC was also unable to get any more credit, he said.
CEBs customers also owe the agency 33 billion rupees, he said.
CEB’s revenues are now 14 to 15 billion rupees and expenses are about 20 billion rupees.
“In order to pay the money we will have to for another loan,” Ranatunga said.
The government has also given relief for the tourism sector to settle arrears in 24 installments and domestic customers to settle in four installments.
With problems at its coal plants the CEB has been running liquid fuel plants running down furnace oil stocks.
Meanwhile rains have also ceased, reducing the capacity to generate hydro power as in recent months. (Colombo/Dec18/2021)
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