GHȼ1 fuel levy unjustified and burdensome – Energy Analyst cautions

he Executive Director of the Centre for Environment and Sustainable Energy, Benjamin Nsiah has raised strong concerns over the government’s newly approved GHȼ1 fuel levy, describing it as regressive, uncreative and detrimental to already strained consumers.

In a Citi Business News interview, he questioned the government’s continued reliance on petroleum taxes to address financial gaps in the energy sector.

He argued that while the fuel levy is expected to raise GHȼ5.7 billion to support energy sector obligations, it merely adds to a history of ineffective fiscal interventions that fail to resolve the sector’s structural inefficiencies.

“This approach is not only tired but unfair,” Nsiah said. “We’ve seen this playbook before. The Energy Sector Levies Act (ESLA), the Energy Sector Recovery Levy and none of them has provided a lasting solution to the underlying issues. It’s not about collecting more. It’s about managing what’s already collected.”

Ben Nsiah added that the burden of repeated fuel levies has fallen disproportionately on consumers, who have been paying extra since 2016 with little visible impact on energy sector debts.

According to him, shifting focus from revenue mobilization to fiscal discipline and operational efficiency is the only sustainable path forward.

“For the Minister to say this won’t burden consumers is simply not accurate. The consumer has carried this burden for years, and without reform, this trend will continue,” he cautioned.

The concerns follow Parliament’s passage of the Energy Sector Levies (Amendment) Bill, 2025, which authorizes the GHȼ1 increase in petroleum product levies.

According to Finance Minister Dr. Cassiel Ato Forson, the measure aims to help settle $3.1 billion in energy sector arrears and raise an additional $1.2 billion to procure fuel for thermal generation in 2025.

He maintains that the levy will not raise ex-pump fuel prices.

But this assurance has been met with skepticism. The Minority Caucus walked out during the approval process, describing the levy as inappropriate and alleging that the Majority lacked the constitutional quorum to pass the bill.

Nsiah insists that real reform will only come when the government stops using consumers as a “stopgap funding mechanism” and instead addresses inefficiencies along the energy value chain from procurement to power distribution.

“The problem is not revenue; it is management,” he concluded.