- Fuel Relief Is Fine, But the Real Problem Is the Hidden Levies — Ben Boakye
Ghana’s recent fuel price relief may offer consumers some short-term respite, but the reduction does little to address the deeper structural distortions embedded in the country’s downstream petroleum pricing regime, according to Mr Ben Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP).
Speaking on the government’s decision to cut fuel levies, Mr Boakye described the move as helpful but ultimately inadequate, arguing that the real problem lies in a web of opaque charges and politically exposed margins that, in his view, have turned the downstream sector into a rent-sharing mechanism rather than a genuine source of development finance.
“I think it’s a thoughtful gesture,” Mr Boakye said. “Some reduction at this point really helps moderate the impact of the oil price hike on the consumer.” But he quickly added that the intervention did not go far enough, insisting that “it should be deeper” and that the government should “get into the margins deeper and make sure we make the necessary cuts.”
His critique goes beyond the immediate adjustment. He argues that while many countries use downstream petroleum taxes to fund public goods such as rail systems, mass transit, and social interventions, Ghana has instead accumulated layers of charges that do not function as efficient tax instruments. According to him, many of these levies are neither economically justified nor development-orientated.
“In many countries across the world, the petroleum sector, the downstream sector, enables the government to tax effectively and be able to raise money for development,” he said. “But in Ghana, we have accumulated a lot of margins that are not necessarily tax revenue; instead, they are used to meet the political needs of certain individuals in the political space.”
At the centre of his criticism are the Uniform Petroleum Price Fund and the Primary Distribution Margin, two pricing components he says have become increasingly difficult to justify. The ACEP Boss described the UPPF as an unusually interventionist mechanism that has drifted far from any transparent or defensible economic rationale.
“One of them, if I may, is the UPPF, which is supposed to ensure uniform pricing,” he said. “It’s such a socialist intervention to make sure that prices are uniform across the country.” He added that the margin “has been increased by over 400% in the past eight years or so at the whims of the managers of the margin,” with “no economic model, no scientific justification for why the UPPF should be jumping the way it does.”
For Mr Boakye, the pricing logic has become so distorted that domestic distribution now appears pricier than international import logistics. “Today it costs more, if you add the UPPF and the PDM, which is also a primary distribution margin supposed to move product from depot to depot,” he said. “It is costing us more to import the product from Europe than to move it from, say, Tema to your tank.” He called that a “ridiculous abuse of the trust that we’ve been given to regulators to actually manage our affairs appropriately.”
His proposed remedy is both fiscal and political. Rather than preserving these margins in their current form, he argues that government should strip them back, then convert part of the savings into transparent, legislated tax revenue tied to visible national priorities. “Can you imagine two cedis across the board, that’s almost 12 billion cedis a year that can be aligned to real investment in all the capital cities and ensure that people can move from one point to the other,” he said.
That argument reflects a broader development critique. Mr Boakye says Ghana has failed to use the downstream petroleum sector as an engine for economic transformation, even as consumers continue to shoulder high and often poorly explained charges at the pump. “We need to be able to optimise that space, raise enough revenue and map out strategic development that we need to do to accelerate economic development,” he said. “After the one month we can simply convert that to tax revenue and decide with the people what their priorities are and begin investing in them rather than sharing that money into individual pockets.”
He also pushed back against suggestions that oil marketing companies would be the main losers from a deeper rationalisation of the system. In his telling, the bigger beneficiaries are politically connected intermediaries rather than the industry itself. “I don’t think the industry is going to suffer in any way,” he said. “The industry itself doesn’t even benefit from this. If you check, it’s just those who are managing those contracts who are benefiting.”
Boakye went further, alleging that contracts linked to fuel transportation and distribution are often controlled by politically exposed actors who then subcontract the real work to transport operators, keeping a margin for themselves. “The politicians will get a contract and then they go and get it and give it to the real transporters,” he said. “There’s free money to be shared to political entities who are just frontmen taking money from the UPPF and the PDM.”
His most pointed attack was directed at the transparency of the UPPF itself. “I have for two years asked for how the UPPF is used under RTI and I don’t have the response,” he said. “They can’t give you because that would be a major scandal and exposure on how the UPPF is used.” He added: “People became millionaires by just being managers of the UPPF.”
For readers of Ghana’s energy policy debate, For Mr Boakye’s intervention is significant not because it questions the value of immediate fuel relief, but because it reframes the issue entirely. The more profound question, in his view, is whether Ghana’s downstream pricing framework is serving the public interest at all — or whether it has become a politically protected system that extracts from consumers without building the infrastructure and services those same consumers need.
