From Loss to Profit: How a Tariff Revision Revived the Ceylon Electricity Board

 

Navigating the Tides: How a Tariff Tweak Turned CEB's Fortunes Around

The Ceylon Electricity Board (CEB) is back in the black, a remarkable turnaround that has everyone talking. After facing a staggering Rs. 18.47 billion loss in the first quarter of 2025, the state-owned utility has reported a profit of Rs. 5.31 billion for the quarter ending June 30, 2025. This pivot from deep red to a healthy profit is a testament to the powerful impact of a recent electricity tariff revision.

Just a few months earlier, the picture was starkly different. Following a 20% tariff reduction in January 2025 by the new government, the CEB had been hemorrhaging money. This well-intentioned move, aimed at providing relief to consumers, ultimately came at a significant financial cost to the board, contributing heavily to the massive first-quarter losses.

The shift in strategy, with the government adjusting tariffs again in June, aligns directly with a key requirement from the International Monetary Fund (IMF). The IMF has been a firm voice, consistently emphasizing the need for cost-reflective electricity pricing as a crucial condition for Sri Lanka to access the next part of its Extended Fund Facility (EFF). This latest tariff revision, while potentially a bitter pill for some, was a necessary step on the path to economic stability and securing international financial support.

However, a closer look at the numbers reveals a longer-term challenge. Despite the recent profit, the latest figure is a sharp 85% drop when compared to the impressive Rs. 34.53 billion profit the CEB reported during the same quarter in 2024. This highlights the volatility in the energy sector and underscores the continuous need for careful management to ensure long-term financial health and sustainable operations.

The CEB's story is a compelling case study in balancing public welfare with financial viability, a complex puzzle that many state-owned enterprises grapple with. While the recent profit is a positive sign, the journey to sustained stability is ongoing, with every decision having a ripple effect on the economy and the lives of millions.