Sri Lanka hikes power prices by 66%

Sri Lanka hikes power prices by 66% hoping to gain the IMF support.

Sri Lanka raised electricity prices by 66% on Thursday, in a move the government hopes will persuade the International Monetary Fund to provide a bailout for its crisis stricken economy.

The increase, announced by Power and Energy Minister Kanchana Wijesekera, comes after the government raised electricity prices by 75 percent last year, and adds to the pain of Sri Lankans already struggling with inflation above 54% year-on-year in January and income taxes as high as 36% percent.

"We know that this will be hard on the public, especially the poor, but Sri Lanka is caught in  a financial crisis and we have no choice but to move towards cost reflective pricing," Wijesekera told reporters

Sri Lanka is in the midst of its worst financial crisis in seven decades and must put its massively indebted public finances in order to unlock a $2.9 billion IMF loan that was agreed in September. This charges will be more problem to poor people.

 Mass protests against economic mismanagement drove former President Gotabaya Rajapaksa from power last year after thousands took over his official residence and office.

Since taking over in July, President Ranil Wickremesinghe has desperately sought support from international creditors, especially the IMF..