By Uditha Jayasinghe
COLOMBO, Feb 21 (Reuters) - The latest electricity price
rise in crisis-hit Sri Lanka has left stall owner Mohammed
Lafeel in a quandary: the 66% increase means he can't afford to
pay for electricity but can't manage without it so goes deeper
into debt to keep it on.
Over the last month, with inflation hovering at 55%
year-on-year, Lafeel says his income has fallen by about a third
as fewer customers buy his knick-knacks as more of them struggle
under the island's worst financial crisis in seven decades.
Lafeel says he doesn't know how he can repay the 300,000
rupees ($835) he borrowed for his daughter's wedding and has had
to borrow more to reconnect the power at home after it was cut
off because he hadn't paid the bill.
"Everyone is under pressure," Lafeel told Reuters at his
stall next to the main railway station in the city of Colombo,
days after the second power price increase since a 75% rise in
August.
"But how can we manage without power?"
The power price increase is the latest measure by Sri Lanka
to clinch a $2.9 billion loan from the International Monetary
Fund (IMF) to tackle a crisis that evolved from the confluence
of the COVID-19 pandemic battering its tourism-reliant economy,
rising oil prices and populist tax cuts by a previous
government.
President Ranil Wickeremesinghe took office last July
promising to pull the country out of crisis after protests
against the economic mess led to the downfall of his
predecessor.
On Tuesday, the cabinet said talks with the IMF were in the
final stage. The government hoped to reach a deal by March and
gradually reduce record-high interest rates in line with
inflation, the president's office said.
'VERY UNFAIR'
Like most of Sri Lanka's 22 million people, Sanjula Peiris,
managing director of family-owned Wish Bakers, desperately needs
a break from food inflation, running at a stubbornly high 60%
year-on-year.
The company, which has 15 outlets in the outskirts of
Colombo, decided not to increase prices for fear of losing
business. Their costs, however, have tripled in the past year,
with the latest electricity bill increase adding to the burden.
"It's not just the ovens, most of our machines need power,"
Peiris said. "We're struggling to maintain our business."
About 200 of Sri Lanka's 5,000 bakeries have shut down, said
N.K. Jayawardena, president of the largest bakeries union, the
All Ceylon Bakeries Association.
Many of those still running have laid off staff, he said.
"This power tariff increase is very unfair, especially when
it comes on top of so much hardship," he said.
The government has acknowledged the pain of the higher
electricity bills but said it had no other way out of the
crisis.
Carpenter Mohamed Sathurudeen said that was cold comfort.
"We can't afford a hike in electricity prices, we're already
suffering great economic difficulty," he said.
"If the government can't find a solution to this, then it
has failed. Please give this to someone who can manage it
properly."
($1 = 359.3200 Sri Lankan rupees)
(Reporting by Uditha Jayasinghe, additional reporting by Channa
Kumarsa and Waruna Karunatilake; writing by Miral Fahmy; editing
by Robert Birsel)
