Fix the root, not the symptoms – ASEC condemns GH¢1 fuel levy

The Africa Sustainable Energy Centre (ASEC) has criticized the government's new GH¢1 fuel levy. They say it adds financial strain on citizens and ignores key issues in Ghana's energy sector.

In a press release on June 4, 2025, ASEC called the levy “short-sighted.” They argue it targets citizens instead of addressing structural weaknesses in the energy sector. The GH¢1 charge per litre of fuel could worsen inflation and raise costs for essential goods and services.

“Fuel is vital to Ghana’s economy,” ASEC stated. It affects agriculture, transportation, and food distribution. The new levy increases this burden without solving core issues in the sector.

ASEC urged the government to fix inefficiencies within the Electricity Company of Ghana (ECG). They highlighted problems like outdated infrastructure and poor revenue collection as root causes of the crisis.

“Why are we failing to collect what is already due?” ASEC asked. They called for transparency and efficiency in managing the energy sector instead of shifting costs to consumers.

The Centre also expressed concerns about how existing energy levies are used. They noted that funds from these levies sometimes go to unrelated projects.

“These funds should stabilize the energy sector,” ASEC said. Misuse erodes public trust and dilutes their impact.

Citing the Finance Minister, ASEC stated: “We must not reward inefficiency with higher tariffs.” They believe this principle applies to taxation as well.

Introducing a new fuel levy without reforms rewards inefficiency, they argued. It delays necessary changes in the sector.

ASEC reported that Ghana’s energy sector accumulates liabilities of about $70 million monthly. These debts will continue rising without bold reforms, they warned.

They called for urgent actions like reforming ECG operations and investing in smart metering. Stronger regulatory oversight is also needed to eliminate losses and ensure proper use of funds.

“We must weed out bad elements from the system,” ASEC cautioned. “Decisive leadership and systemic reform are needed now.”