Gov’t Tables Energy Levy Bill, Proposes ₵1 Fuel Tax to Tackle Dumsor

Finance Minister Dr. Cassiel Ato Forson presented a new bill today. This Energy Sector Levy Amendment Bill is controversial. It proposes a GH¢1 per litre levy on all petroleum products sold in Ghana.

If approved, this measure will tax petrol, diesel, and other fuels. The government aims to raise funds to address a US$3.1 billion energy sector debt.

Dr. Forson warned Parliament about the dire state of Ghana's power sector. He stated that urgent action is needed to stabilize electricity generation. The debt includes arrears owed to Independent Power Producers (IPPs) and fuel suppliers.

A key reason for the urgency is the complete drawdown of two guarantees in 2024. These include a US$512 million World Bank IDA guarantee and a US$120 million GNPC guarantee. The government now faces an additional US$632 million shortfall.

Despite the proposed tax, Dr. Forson reassured Ghanaians about prices at the pump. He said consumers would not pay more for petrol or diesel starting today.

He explained that gains from the Ghana Cedi's strong performance allow this levy without immediate price increases. "Our simulations suggest no increase in prices if the levy is imposed," he added.

The new levy proceeds will be used exclusively for fuel procurement by power generation companies. Currently, these companies do not recover fuel costs through electricity tariffs.

"This levy is a strategic intervention," Dr. Forson emphasized, "to ensure stable power supply and promote long-term financial health."