Sri Lanka electricity tariff rise was approved by the Public Utilities Commission of Sri Lanka (PUCSL), with an 18 percent increase imposed on consumers using more than 180 kilowatt-hours (KWh) of electricity per month from May 11.
Sri Lanka electricity tariff rise targets high-usage consumers
The latest revision comes amid rising fuel costs, controversy surrounding lower quality coal imports, and mounting pressure on the country’s power sector as authorities attempt to manage electricity generation expenses while protecting lower-income households.
In a statement issued on Saturday, the PUCSL said the special tariff revision was based on cost estimates submitted by the National System Operator on April 28. The regulator said it had reached its final decision after considering public consultation submissions and government subsidy policies before approving the increase.
The new adjustment follows an earlier 25.3 percent tariff hike implemented on April 1 for consumers exceeding the 180 KWh threshold, making this the second major revision within a short period. Despite the latest increase, the regulator maintained that approximately 95 percent of electricity consumers would not experience additional tariff increases under the revised pricing structure.
Officials said the Sri Lanka electricity tariff rise was influenced by higher thermal power generation costs and operational challenges linked to coal supply issues. The increase also comes after political controversy surrounding the import of lower quality coal, which opposition parties claimed would inevitably lead to higher electricity prices and supply inefficiencies.
The coal procurement issue gained further attention following the resignation of the country’s energy minister last month. Critics argued that the import of substandard coal had contributed to generation inefficiencies and increased operational costs within the national power system.
However, the PUCSL stated that it had taken measures to prevent consumers from directly bearing the additional financial burden caused by the coal shortage. The regulator said it had issued a directive requiring the National System Operator to absorb the extra generation costs associated with coal-related supply issues rather than passing them on through electricity tariffs.
According to the directive, the National System Operator must compensate the Electricity Generating Company for additional costs incurred due to the coal shortage and submit monthly reports to the commission detailing those payments and operational adjustments.
At the same time, the revised PUCSL electricity tariffs introduced relief measures for low-income households and selected social service institutions. The regulator approved reductions in fixed charges and energy charges for domestic users consuming between the first 30 units and the 31–60 unit blocks, aiming to ease the burden on vulnerable consumers facing rising living costs.
Tariffs for religious institutions and charitable organizations were also revised downward as part of efforts to support community-based services and social welfare activities that rely heavily on affordable electricity access.
The latest tariff restructuring also included new measures aimed at supporting the country’s transition toward renewable and sustainable energy solutions. The commission introduced a separate pricing structure for electric vehicle charging stations, with differentiated rates for off-peak, daytime, and peak-hour electricity consumption.
Officials said the revised EV charging tariff model is intended to encourage efficient power consumption while helping manage pressure on the national electricity grid during periods of high demand.
The Sri Lanka energy sector continues to face significant financial and operational challenges as authorities attempt to balance cost recovery, energy security, and consumer affordability. Analysts note that global fuel price fluctuations and dependence on imported energy resources continue to expose the country’s electricity sector to external shocks.
The PUCSL also acknowledged concerns raised by businesses regarding rising operational expenses linked to energy costs. As part of the latest revision, the commission said small and medium enterprises (SMEs) and the hotel sector would benefit from restructuring of demand charges designed to improve competitiveness and reduce pressure on productive sectors of the economy.
Industry observers say the government and regulators are increasingly attempting to balance economic recovery efforts with the financial sustainability of the electricity sector, especially as Sri Lanka continues broader fiscal and structural reforms.
The latest tariff decision highlights the ongoing challenge of maintaining reliable electricity generation while limiting the impact of rising energy costs on households and businesses. Market analysts believe future tariff adjustments will likely depend on fuel import prices, coal procurement efficiency, renewable energy expansion, and the pace of broader reforms within the national energy system.