Study on Household Expenditure on Utility Services in Sri Lanka

Sri Lanka’s electricity and water suppliers are government-owned corporations. The government subsidizes these services to ensure that electricity and water services remain affordable to customers. Existing electricity and water tariffs are not cost-reflective. A survey was conducted to study household expenditure on utility services reveals that households spend more on telecommunication services (voice and data) compared with electricity and water, which are essential services. Customers receiving a subsidy do not really value the subsidy while government corporations incur large losses. There is a dire need to price electricity and water at cost-reflective levels, to enable the corporations to minimize financial losses and to improve the quality of service provided to consumers.