Parliament passes GH¢1 fuel levy to tackle energy sector debt

Parliament has passed the Energy Sector Levy (Amendment) Bill, 2025, introducing a new GH¢1 levy per litre on petroleum products. The bill, pushed through under a certificate of urgency on Tuesday, June 3, is expected to generate an additional GH¢5.7 billion annually to tackle the country’s energy sector debt and shortfalls.

Finance Minister Dr. Cassiel Ato Forson revealed that as of March 2025, Ghana’s energy sector debt stands at US$3.1 billion. An estimated US$3.7 billion is needed to clear the debt entirely, with an additional US$1.2 billion required to sustain thermal fuel supply throughout 2025.

Despite opposition, the government insists the levy won’t immediately increase fuel prices. Dr. Forson assured Parliament that “the impact of the new levy on ex-pump prices would be absorbed by the gains made from the strong performance of the Ghana Cedi.”

Economist and University of Ghana professor, Godfred Bokpin, has backed the levy as a necessary move, even if unpopular. Speaking on Joy FM’s Super Morning Show, he said, “I think I have said it before that there are painful decisions ahead of us, especially in the energy sector… we face a considerable challenge navigating a path towards progressive spending without undermining the stability we are seeing right now.”

He added that currency gains make this an opportune moment. “Under the circumstance, I have a soft side towards this imposition, largely also because of the gains that have been conferred especially in the ex-pump pricing formula given the strengthening of the local currency.”

However, he stressed, “It is not supposed to be a permanent levy… we want to take this out.”

Still, the bill met stiff opposition. The Minority Caucus walked out during the vote, calling it “an inappropriate burden on Ghanaians” and questioned whether the Majority had enough members present to pass the bill legally.

Majority Leader Mahama Ayariga defended the move, urging Ghanaians to support the initiative. “One cedi, just one cedi” per litre, he said, would help fix the persistent power outages, adding, “This is not the E-levy.”

While the government frames the levy as a strategic step, the controversy reveals deep divides over how to fix Ghana’s energy challenges.