Energy Expert Criticises GHS 1 Fuel Levy as Regressive
Executive Director of the Centre for Environment and Sustainable Energy, Benjamin Nsiah, has sharply criticised the government’s newly approved GHȼ1 fuel levy, describing it as a regressive tax measure that unfairly burdens consumers and fails to address the root causes of Ghana’s persistent energy sector challenges.
In an interview, Mr Nsiah questioned the rationale behind the government’s continued dependence on petroleum taxes to close financial gaps within the energy sector. He argued that the fuel levy, projected to generate GHȼ5.7 billion in revenue, is yet another short-term intervention that sidesteps long-needed structural reforms.
“This approach is not only tired but unfair,” Mr Nsiah remarked. “We’ve seen this playbook before with ESLA and the Energy Sector Recovery Levy. None of them have offered lasting solutions. It’s not about collecting more—it’s about managing what’s already collected.”
He contended that since the introduction of fuel-based levies in 2016, Ghanaian consumers have borne a disproportionate share of the financial burden, yet energy sector arrears have persisted with little visible improvement in operational performance.
Parliament last week passed the Energy Sector Levies (Amendment) Bill, 2025, paving the way for a GHȼ1 increase in petroleum product levies. Finance Minister Dr Cassiel Ato Forson, defending the move, said the measure is necessary to clear $3.1 billion in legacy debts and raise an additional $1.2 billion to finance fuel procurement for thermal power generation in 2025.
Dr Forson further assured that the new levy would not translate into higher ex-pump fuel prices for consumers.
However, that assurance has been met with public scepticism and political resistance. The Minority Caucus staged a walkout during the bill’s passage, describing the levy as ill-timed and alleging that the Majority lacked the constitutional quorum required for its approval.
Mr Nsiah, however, insists that the problem lies not in revenue shortfalls but in mismanagement and inefficiencies along the energy value chain—from procurement to transmission and distribution.
“For the Minister to say this won’t burden consumers is simply not accurate,” he stated. “The consumer has carried this burden for years, and without reform, this trend will continue.”
He further called for a strategic shift from revenue mobilisation to fiscal discipline and operational efficiency, warning that Ghana risks prolonging its energy crisis if consumer-based levies continue to be used as a stopgap funding mechanism.
