Sri Lanka raises power tariffs as energy costs begin to bite
People in a queue push their scooters as they wait to refuel, outside a fuel station, after the government declared a weekly Wednesday holiday for public officials to conserve fuel, amid concerns over fuel supplies during the U.S.-Israeli conflict with Iran, in Colombo, Sri Lanka, March 18, 2026. REUTERS/Thilina Kaluthotage
COLOMBO, March 30 : Sri Lanka raised power tariffs for most households by 7.2 per cent and industries by 8.7 per cent on Monday as the island nation grapples with higher energy costs stemming from the Iran war.
The new power prices are linked to a $2.9 billion program with the International Monetary Fund that Sri Lanka signed in 2023 to help recovery from a severe financial crisis.
Under the program, Sri Lanka implements cost-reflective energy pricing multiple times a year to keep its state-run power monopoly, the Ceylon Electricity Board, financially stable.
Hotels, linked to Sri Lanka's crucial tourism sector, will pay 9.9 per cent more, the country's power regulator said in a statement. Poorer households will pay between 4.3 per cent to 6.9 per cent more under the new prices.
"If energy prices increase much more due to the war we will consider a fresh request to raise power prices," Prof. K.P.L. Chandralal, chairman of the Public Utilities Commission of Sri Lanka told reporters in Colombo.
The CEB had initially requested for a price hike of 13.56 per cent to cover a 15.8 billion rupee ($52.6 million) revenue shortfall caused by rising costs. The new tariffs will be implemented from the beginning of April.
Sri Lanka declared every Wednesday a public holiday, introduced fuel rationing, and raised pump prices by about 35 per cent earlier this month to manage fuel consumption.
The island is in talks with Russia, India and the U.S. to procure uninterrupted supplies of fuel and is spending $600 million to purchase refined fuel for April, State-run Ceylon Petroleum Corporation Chairman Janaka Rajakaruna said over the weekend.
The country is struggling to purchase 90,000 metric tons of crude oil needed to keep the island's only refinery running and produce enough stocks of furnace oil to run its thermal power plants, Rajakaruna said.
