Powering Reform: Why Electricity Tariffs Must Be Rewired for Sri Lanka’s Future

Sri Lanka’s electricity tariffs have never made much economic sense. They’re full of distortions, cross-subsidies and based on outdated assumptions. This is why the Advocata Institute recently made a formal submission to the Public Utilities Commission of Sri Lanka (PUCSL), proposing a complete overhaul of the way electricity is priced.

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Reforming Sri Lanka’s Electricity Tariffs: Principles for a Sustainable Future

The proposed reforms present an opportunity to rationalise the tariff structure. Consumers using the same commodity under similar conditions should pay comparable rates, with only one justified differentiation: a lifeline tariff for low-income domestic users. This principle supports equity while ensuring cost recovery.

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