Sri Lanka’s Middle Class Hit by Hidden Power Cost Burden

Himasha Dissanayake, JadeTimes Staff

H. Dissanayake is a Jadetimes news reporter covering Economy

---

Source: CEB

Colombo, Nov. 22, 2025 — The Ceylon Electricity Board (CEB) is selling electricity at a loss to nearly 70% of its customers, forcing higher consumption users to bear a disproportionate share of the cost, Energy Minister Kumara Jayakody told Parliament yesterday during the 2026 budget debate.

According to the Minister, the average generation cost has been reduced to Rs. 19.20 per unit, but electricity is being sold at significantly lower rates for households consuming below 90 units. Those using over 180 units are billed Rs. 61 per unit, or more than three times the cost of generation.

Jayakody noted that around five million low-use customers benefit from tariff reductions made over the past year. However, analysts argue that higher-consuming households largely Sri Lanka’s middle class earners who cannot afford solar power — are effectively paying a “hidden tax” to keep the CEB operating at break-even levels.

Critics warn that the current structure amounts to a coercive cross-subsidy that is neither recorded as taxation nor transparently targeted through welfare schemes. They also highlight that religious institutions receive rates as low as Rs. 4.50 per unit, while middle-income homes face the steepest tariffs.

The government meanwhile plans to accelerate grid upgrades and renewable energy integration, which may lead to further cost pressures. The Minister did not clarify whether future reforms would reduce the burden on middle-income consumers.