COLOMBO, Sri Lanka / MENA Newswire / — Sri Lanka’s power regulator has approved an extraordinary 18% increase in electricity tariffs for households and other users with higher monthly consumption, a move aimed at covering rising generation costs and maintaining power-sector financial stability. The Public Utilities Commission of Sri Lanka issued the decision on May 9, with revised rates taking effect on May 11, 2026, for customers served by national distribution operators and Lanka Electricity Company.
PUCSL said the 18% increase applies to domestic electricity users consuming more than 180 kilowatt-hours a month, a group representing about 5% of consumers. The same increase applies to selected non-domestic categories, including government institutions, large industrial users, higher-tier general-purpose customers, hotels, religious and charitable users above 180 units, street lighting accounts and domestic time-of-use customers. Tariffs for domestic users consuming 180 units or less remain unchanged.
The regulator said an overall 18.10% increase was required to address a projected revenue shortfall of 39.252 billion Sri Lankan rupees for April through September 2026. PUCSL estimated total electricity-sector costs for the period at 323.694 billion rupees, compared with revenue of 277.498 billion rupees at existing tariffs, before accounting for a carried-forward surplus of 6.943 billion rupees.
A 15 billion-rupee government subsidy will be used to prevent tariff increases for domestic users up to 180 units and other selected consumer groups, keeping charges unchanged for about 95% of electricity consumers. The subsidy allocation limits the impact of the Sri Lanka electricity tariffs revision to higher-consumption households and specific institutional and commercial categories.
Subsidy shields consumers
The May decision followed revised generation-cost projections submitted by the National System Operator on April 27 after PUCSL had set second-quarter tariffs on March 30. PUCSL treated the submission as a request for an extraordinary tariff review under the Sri Lanka Electricity Act No. 36 of 2024, as amended, and conducted stakeholder consultations before issuing the final determination.
PUCSL attributed the higher cost outlook to weaker hydroelectric generation forecasts, rising electricity demand and increased fuel prices. The regulator approved demand forecasts of 4,695 gigawatt-hours for the second quarter and 4,866 gigawatt-hours for the third quarter, while reducing major hydro generation expectations to 973 gigawatt-hours and 1,213 gigawatt-hours for the same periods.
Lower hydro generation
The tariff decision also cited slightly below-normal rainfall forecasts across most hydro catchment areas from May 2026 and the possible influence of emerging El Niño conditions on rainfall patterns. Lower hydro availability typically increases reliance on thermal power generation, raising exposure to coal, diesel, furnace oil and naphtha costs.
The approved Sri Lanka electricity tariffs revision places most of the additional burden on higher-consumption users while preserving existing rates for lower-use households. The decision gives the power sector a revised revenue framework through September 2026, with future adjustments dependent on demand, fuel prices, rainfall, generation mix and regulatory review outcomes.