Fuel prices across Ghana have surged following the implementation of a revised Energy Sector Levy, sparking debate over the government’s strategy to tackle mounting energy sector debt.
According to the Chamber of Petroleum Consumers (COPEC), the new levy—introduced under the Energy Sector Shortfall and Debt Repayment Levy (ESSDRL), part of the amended Energy Sector Levies Act (Act 1141)—adds GHS1 per litre to the cost of petrol and diesel.
The move is intended to support debt clearance and infrastructure financing within the energy sector.
COPEC reports that petrol prices have risen by 6.47%, averaging GHS12.34 per litre, while diesel has jumped by 9.3% to GHS14.18 per litre. In contrast, liquefied petroleum gas (LPG) saw a slight reduction of 0.45%, bringing it to GHS11.55 per kilogram.
Executive Secretary of COPEC, Duncan Amoah, raised concerns over the timing and impact of the levy.
“Fuel taxes now make up 26.5% of pump prices. While the government needs revenue, there is an urgent need to restructure the tax regime to protect consumers,” he said.
Amoah also warned oil marketing companies against inflating prices beyond the stipulated margins and reiterated the need for subsidies on LPG to support cleaner energy adoption among low-income households.
Despite global crude oil prices falling by 5% to $70.79 per barrel, the new levy is expected to put pressure on transportation costs and inflation.
Government officials have defended the levy, arguing that it is essential to stabilizing the country’s energy sector.
The Finance Ministry said the funds will be used to pay down legacy debts that have constrained investment and hampered operations across the energy value chain.
COPEC also renewed its call for the government to revamp the dormant Tema Oil Refinery, emphasizing that reducing reliance on imported refined products is critical for insulating consumers from international market volatility and exchange rate fluctuations.
As the levy takes hold, economic analysts and citizens alike are watching closely to assess its broader impact on Ghana’s cost of living and fiscal stability.
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