By Shabiya Ali Ahlam
Blessings from the weather gods helped the local energy sector’s production capacity shoot up within the first five months of 2015, saving the nation from having to further widen its trade deficit by importing more oil.
Due to ample rainfall in the past few months, the Ceylon Electricity Board (CEB) was able to successfully increase its hydro production by a staggering 249.4 percent year-on-year (YoY) to 479 Gwh. In absolute terms the nation produced 342 Gwh compared to the corresponding period in 2014 where only 137 Gwh was generated.
Provisional data from the Central Bank (CB) showed that the hydro production surge has resulted January – May diesel sales to contract by 20.1 percent to 730,000 MT from 924,000 MT the previous year.
The boost is also observed to have helped the CEB to be self-dependent as within the first five months this year the entity has purchased 64 percent less power from private producers compared to the same period in 2014.
The favourable weather condition has positively impacted the nation’s Balance of Payment (BOP) stance as with increased productivity Sri Lanka’s crude oil imports contracted by 24.6 percent, from 733,000 MT in 2014 to 553,000 MT in 2015.
The improved production capacity augurs well not only for the energy sector but for the economy as well, as it is currently in a highly volatile situation, edging towards a BOP crisis.
With exports keeping up with its poor performance, imports expenditure soaring, along with the rupee coming under pressure over a strengthening dollar, the improved production can be called a silver lining to the worsening trade deficit.