Some analysts are cautioning that the newly approved GH¢1 fuel levy could drive fuel prices higher, thereby adding further strain on consumers and the downstream sector.
Others have criticised government for imposing the levy without proper consultation. The Energy Sector Levy (Amendment) bill, 2025 – which introduces an additional GH¢1 charge on every litre of petroleum products – was passed late Monday, 3rd June as a measure to generate funds for tackling Ghana’s mounting energy sector debt, currently estimated at US$3.1billion.
Meanwhile, former Minister for Energy Dr. Kwabena Donkor justified the newly introduced GH¢1 fuel levy by arguing it is a necessary step to help tackle Ghana’s ballooning legacy energy debt.
The country faces a dual challenge of outstanding debts owed to Independent Power Producers (IPPs) and inability to recover the full cost of power generation and distribution.
Dr. Donkor observed that under-recovery is a ticking time-bomb that continues to undermine the sector’s financial health.
On the other hand, Dr. Riverson Oppong Peprah, Chief Executive Officer-Association of Oil Marketing Companies (AOMCs), said member oil marketing companies are seeing their margins steadily shrink.
He stressed that the downstream sector is unfairly burdened, despite already carrying significant levies – including ESLA – which fund energy sector debts.
Energy Minister John Jinapor, for his part, believes the recently introduced GH¢1 fuel levy is expected to generate between GH¢5billion and GH¢6billion to support procurement of liquid fuel. Even then, he says, the amount will still fall short of what is needed.
He maintains the levy as a necessary intervention to address Ghana’s mounting energy sector debt.
However, some civil society organisations have raised strong concerns over government’s newly approved GHȼ1 fuel levy – describing it as regressive, uncreative and detrimental to already strained consumers.
According to Finance Minister Dr. Cassiel Ato Forson, the energy sector debt currently stands at US$3.1billion and US$3.7billion dollars is required to clear the arrears fully. Additionally, government needs an additional US$1.2billion to procure fuel for thermal power generation in the year 2025.
In fact, Dr. Forson believes the levy increase will not result in a rise of ex-pump fuel price.
The Minority Caucus in parliament staged a walkout during the approval process.
