Sri Lanka’s state-run electricity monopoly will raise tariffs by a stinging 264 per cent for people consuming the least, it announced on Tuesday, while higher users will face a smaller increase.

The loss-making Ceylon Electricity Board (CEB) said the regulator had allowed it to carry out the sharp increases, the first in nine years, from Wednesday to recoup part of its accumulated losses of $616 million.

The CEB had asked for a bigger tariff increase of over 800pc, but the regulator capped it at a maximum of 264pc, officials said.

Two-thirds of the 7.8m households using less than 90 kilowatts a month will be affected by the highest increases, while bigger consumers will pay about 80 percent more, according to official records.

The smallest consumers, currently charged 2.50 rupees a unit, will be charged 8.0 rupees. Bigger consumers, being charged 45 rupees a unit, will have to pay 75 rupees ($0.20).

Sri Lanka is facing its worst economic crisis after running out of foreign exchange reserves to finance even its most essential imports such as food, fuel and medicine.

The country is also facing hyperinflation and lengthy electricity blackouts after the CEB was unable to buy oil for its thermal generators.

Unable to repay its $51 billion foreign debt, the government declared it was defaulting in April and is negotiating with the International Monetary Fund for a possible bailout.