Sri Lanka raised electricity prices by 66 per cent on Thursday (February 16) with the government hoping that the move will pursuade the International Monetary Fund (IMF) to think of a bailout for the crisis stricken country. The increase in power prices was announced by Power and Energy Minister Kanchana Wijesekra. The current spike has followed a 75 per cent increase last year and is sure to add to the hardships of ordinary Sri Lankans already battlibg inflation that has crossed 54 per cent year-on-year in January. The income taxes are as high as 36 per cent.
“It is not the view of the government that we should continue this by placing the entire burden on the people. After looking at all options, we had to come to this conclusion reluctantly, as it’s the only viable option available,” Wijesekera told reporters.
Wijesekra said that the latest price hike is aimed at helping the power ministry offset dip in revenue caused by cessation of government subsidies in January. He added that the price hike will also help the ministry manage long-termfuel contracts.
The IMF agreed to loan Sri Lanka $2.9 billion in September to overcome its worst financial crisis in seven decades, but the deal comes with conditions that include raising taxes, removing subsidies and cutting public sector debt. The government of President Ranil Wickremesinghe, who took over after mass protests against economic mismanagement ousted his predecessor last year, desperately needs the funds and has been courting multilateral agencies for support since taking office in July.
(With inputs from agencies)