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The Government of Ghana has tabled a new Energy Sector Levy Amendment Bill in Parliament, seeking to introduce a GH¢1 tax per litre on all petroleum products as part of an emergency plan to address the country’s deepening energy sector crisis.
Finance Minister Dr. Cassiel Ato Forson, who presented the bill under a certificate of urgency on Tuesday, said the proposed levy is crucial to clearing a ballooning US\$3.1 billion debt that has crippled the energy sector.
According to the Minister, the debt includes arrears owed to Independent Power Producers (IPPs), State-Owned Enterprises (SOEs), and key fuel suppliers, which have led to severe financial strain and increased risk of power outages, commonly referred to in Ghana as dumsor.
“A major part of the crisis stems from non-payment of bills to key power providers like ENI and Karpowership, which led to the complete drawdown of a US\$512 million World Bank guarantee and a US\$120 million GNPC facility,” Dr. Forson revealed. “We now urgently need US\$632 million to restore these guarantees and stabilise the power sector.”
To generate the necessary funds, the government is proposing a GH¢1 increase in the ex-pump price of petrol, diesel, and related products. However, the Finance Minister was quick to assure the public that consumers would not immediately feel the impact of the tax due to the recent strong performance of the Ghana cedi.
“Our simulations suggest there will be no increase in the ex-pump price of petrol and diesel in the next pricing window if this levy is imposed,” Dr. Forson stated. “The gains made by the cedi will cushion the effect.”
He explained that the new levy would serve as a dedicated source of funding for the procurement of fuel essential to electricity generation, noting that current electricity tariffs do not account for fuel costs.
“This levy is designed to guarantee a reliable power supply while also ensuring long-term financial stability in the sector,” he said.
The announcement has already stirred debate in Parliament and among stakeholders, with critics expressing concern over the potential long-term burden on consumers. Nonetheless, the government insists the measure is necessary to prevent a return to widespread blackouts and restore investor confidence in Ghana’s energy infrastructure.
If approved, the levy is expected to be implemented immediately.
