The Ceylon Electricity Board made an operational loss of 61.2 billion rupees, up from 19.3 billion rupees and Ceylon Petroleum Corporation lost 89.7 billion rupees, down from 94.5 billion rupees a year earlier, the Central Bank said it is annual report.
In 2012 the CPC raise the prices of some subsidized fuel sold to the CPC.
Bank borrowings by the two utilities had risen 84.4 billion rupees (1.1 percent of GDP) to 245 billion rupees during the year (3.2 percent of GDP). Fitch Ratings has said that 20 percent of all loans by Bank of Ceylon were to the CPC.
Of that CPC had borrowed 53.7 billion rupees.
"The continuous increase in operational losses of CPC has also resulted in a loss in tax revenue to the government," the Central Bank said.
"Further, CPC’s increased borrowings from the banking sector to finance its oil bills increased the banking sector’s exposure to the CPC."
Though state-run Sri Lanka Airlines had settled 18 billion rupees out of dues of 26 billion rupee in 2013, state entities owned CPC 85 billion rupees.
The Central Bank said CPC was losing money mainly because furnace oil was sold to CEB at a loss partly due to a rise in crude prices, exchange rate depreciation and also due to its refinery losing Iranian crude due to US sanctions.
CEB's short term borrowings to the CPC, independent power producers and banks were 137 billion rupees. Its long term liabilities were 296 billion rupees.
Though Sri Lanka reported a budget deficit of 6.4 percent of GDP for the losses at the two entities alone amount to 2.0 percent of GDP.
The CPC is expected to raise furnace oil prices to the CEB from this month, and the CEB is expected to raise tariffs.
Underpriced energy is the biggest threat to Sri Lanka's economic stability as lack of a pricing formula exposes the country to oil price shocks.
From mid 2011, credit taken to finance losses at CEB and CPC, which were ultimately monetized through sterilized forex sales by the Central Bank led to a balance of payments crisis.
The losses at state enterprises in addition to increasing the overall public sector deficit, also depresses national savings. The state entities are classified as private sector when calculating the domestic savings rates in Sri Lanka.
Top central bank officials said disaggregated data will be presented in the future.