By Lily YARNIE
Over the past few months, Ghanaians have experienced a rare and welcome change at the fuel pumps: a drop in fuel prices.
From highs of GH¢15.30 per litre for petrol and GH¢15.66 for diesel in December 2024, prices have now dropped to as low as GH¢11.77 and GH¢12.49, respectively, in June 2025.
That’s a saving of roughly GH¢3 per litre for all of us—and it’s no accident. The appreciation of the Ghanaian cedi and a fall in global oil prices have made this possible.
But as we breathe this small sigh of relief, the Finance Minister has proposed a GH¢1 per litre levy on petrol and diesel. It’s understandable that many are reacting with concern, given past trauma—previous governments introduced taxes with little to show for it. But let’s step back, look at the numbers, and understand what’s really at stake here.
Why the levy?
Ghana’s energy sector is in crisis, and we’re not just talking about technical challenges—we’re talking about money. It is currently saddled with a US$3.7 billion debt (roughly GH¢50 billion).
On top of that, Ghana needs another US$1.2 billion this year alone just to keep thermal plants running. If we don’t act, this debt will destabilize the sector and threaten power supply for homes, hospitals, factories, and schools.
The proposed GH¢1 fuel levy is expected to generate about GH¢5.7 billion annually … that is if you multiply the levy by our anual estimated usage of the levied product, to be clear: that’s not even close to solving the problem.
It will cover only 11.4percent of the GH¢50 billion needed. This is just a stopgap—a necessary measure to keep things afloat while the government seeks additional financing to resolve the full debt burden.
But didn’t the previous government cause this?
Yes. It’s important to be honest. The previous administration left behind a legacy of massive debts and sector-wide mismanagement. The energy sector was particularly hard-hit, but education, health, and agriculture were also deeply affected.
By the end of 2023, Ghana’s total public debt had ballooned to over GH¢610 billion, according to official records. Much of this debt came from unsustainable borrowing, poor project execution, and in many cases, zero accountability. So, the government we have today inherited a broken system. And fixing that system comes at a cost—one that must be paid, whether we like it or not.
Why this tax might not hurt as much as you think
The levy is being introduced at a time when we’re already saving about GH¢3 per litre. So, even with the new GH¢1 charge, we’re still paying less than we did six months ago.
Importantly, the Finance Minister has assured Ghanaians that fuel prices will not go up in the next pricing window. This has been confirmed by simulations from the Ministry of Finance and supported by the stability of the cedi and reduced international market prices.
Where is the gold and oil money going?
Another fair question. Ghana has made significant gains from gold and oil exports, and citizens are right to ask how that money is being used. Here’s what we know:
- A portion of these revenues has been disbursed to fund Free SHS, ensuring that Ghanaian children can continue accessing secondary education without tuition barriers and have good feeding conditions. The GETFUND has been credited with GH¢2,710,227,947 for this purpose.
- Another tranche has gone to support the MMDCEs, allowing local governments to function effectively. They have received a total of GH¢987,965,073 million.
This kind of targeted spending is a sign that the current administration is prioritizing essential services and keeping its focus on development and stabilization.
The trauma is real—but let’s stay objective
Yes, we’ve been hurt before. Past governments have taxed us, borrowed recklessly, and left nothing but invoices behind. But this is not the same situation. The Finance Minister, Dr. Cassiel Ato Forson, has shown a level of transparency and clarity rarely seen in our recent political history.
Many have grown to trust him, and that trust has been earned, not gifted. This doesn’t mean we give him a blank cheque. If he fails to do as he’s promised, I will be among the first to call him out. Accountability is non-negotiable. But for now, considering the broader picture, I believe we should give him the benefit of the doubt.
Net-net: Are we losing? No.
When you take everything into account:
- We’re still paying less for fuel today than we did in late 2024.
- The GH¢1 levy is a small fraction of the savings we’re enjoying.
- The revenue raised will help keep the lights on—literally—without burdening future generations with even more debt.
- And the government is finally using oil and gold revenues to fund the things that matter: education, local governance, and energy stability.
Why energy sector reforms must walk and work hand in hand with this levy
While the GH¢1 fuel levy can help ease the immediate pressure on the energy sector, it must not stand alone. Ghanaians are not just asking for more money to be thrown at a broken system—they are demanding real, structural reforms.
For the levy to gain lasting legitimacy, it must be coupled with clear, transparent, and measurable changes in how the energy sector operates. These are the core reforms most Ghanaians expect:
- Elimination of waste and corruption – Strict auditing of the energy sector, with real consequences for mismanagement and inflated contracts.
- Transparency and renegotiation of Power Purchase Agreements (PPAs) – Review, renegotiate, or cancel overpriced or unused agreements that continue to drain the public purse.
- Improved revenue collection – Curb illegal connections, enforce bill payment from major users, and plug financial leakages in ECG, VRA, and GRIDCo.
- Investment in Local Energy Production – Prioritize domestic gas processing, renewable energy, and diversification to reduce dependency on expensive imports.
- Timely payment to Independent Power Producers (IPPs) – Prevent blackouts and production disruptions by honouring financial obligations to IPPs in a timely and fair manner.
- Clear communication with citizens – Provide regular, honest updates from the Ministries of Energy and Finance to rebuild and maintain public trust.
- Renegotiation of already signed agreements – Beyond future contracts, Ghanaians expect the government to revisit and renegotiate existing deals that are no longer financially sustainable or beneficial.
If these reforms are actively pursued, the fuel levy will be seen not as another tax burden, but as a necessary and shared national investment in reliable power, financial accountability, and economic renewal. But without reform, even the most well-meant levy will fail—becoming just another painful footnote in Ghana’s long history of fiscal mismanagement.
Final word
We are coming from eight years of poor governance, ballooning debt, and broken systems. But today, we are seeing the beginnings of stabilization—a stronger cedi, lower fuel prices, and a more transparent fiscal agenda. Let’s be vigilant, yes. But let’s also be fair. This is not the time to shoot down a good-faith effort before it’s had a chance to work.
>>>the writer is an advocate for accountable governance, reforms economic clarity and responsible leadership. She is a passionate Ghanaian communicator and social commentator known for her sharp insights on economic policy, governance, and the everyday struggles of the average citizen. With a background in psychology, finance, corporate governance and strategic leadership and a deep personal interest in politics, Lily uses her voice to bridge the gap between public policy and public understanding. Email: [email protected]
