GHȼ1 fuel levy unjustified and burdensome – Energy Analyst cautions

Benjamin Nsiah, Executive Director of the Centre for Environment and Sustainable Energy, has serious concerns about the new GHȼ1 fuel levy. He calls it regressive, uncreative, and harmful to consumers who are already struggling. In an interview with Citi Business News, he criticized the government's reliance on petroleum taxes to fill financial gaps in the energy sector.

Nsiah noted that while the fuel levy aims to raise GHȼ5.7 billion for energy obligations, it adds to a history of failed fiscal measures. “This approach is not only tired but unfair,” he stated. He pointed out that previous initiatives like the Energy Sector Levies Act (ESLA) have not solved underlying issues. “It’s not about collecting more; it’s about managing what’s already collected.”

He emphasized that repeated fuel levies have disproportionately affected consumers since 2016. Despite these extra payments, there has been little impact on energy sector debts. Nsiah believes that focusing on fiscal discipline and operational efficiency is essential for sustainable progress.

He challenged claims from the Minister that this new levy won’t burden consumers. “The consumer has carried this burden for years,” he warned. Without reform, this trend will likely continue.

These concerns arise after Parliament passed the Energy Sector Levies (Amendment) Bill, 2025, which allows for the GHȼ1 increase in petroleum product levies. Finance Minister Dr. Cassiel Ato Forson stated that this measure aims to settle $3.1 billion in energy sector arrears and raise an additional $1.2 billion for thermal generation fuel in 2025.

Forson assured that the levy would not increase ex-pump fuel prices, but many remain skeptical. The Minority Caucus walked out during approval, calling the levy inappropriate and questioning whether there was a constitutional quorum.

Nsiah concluded by stating that real reform will come when the government stops using consumers as a "stopgap funding mechanism." He stressed that addressing inefficiencies in procurement and power distribution is crucial: “The problem is not revenue; it is management.”