Jan 21, Colombo: Sri Lanka Minister of Power and Energy Patali Champika Ranawaka has highlighted the need for introducing a formula to decide the electricity tariff.

Addressing a public function today, Minister Ranawaka has said that losses at the power authority Ceylon Electricity Board (CEB) was due to the absence of a proper price formula.

The Minister has pointed out that the country's annual power consumption is 12,000 gigawatt hours. While Rs. 7 per unit is spent to generate the first 6,000 gigawatt hours, the unit cost for generation of the rest is as high as Rs. 32.

The Minister said that the reason for this is the higher demand for power among a limited number of mass scale clients.

According to the Central Bank the CEB sustained a loss of 25.5 billion rupees in 2011 and loss of Rs. 45-50 billion is estimated for 2012 due to the increase in thermal power generation when the prolonged drought reduced hydropower generation.

The Minister also said that the idea of the hydropower generation capacity reaching to 80% level could not be materialized as the hydropower generation capacity on priority basis is limited to 40 days maximum.

Introduction of a price formula will help both the state run Ceylon Electricity Board and the Ceylon Petroleum Corporation which provides the oil to produce thermal power to cut down heavy losses by recovering cost.