New tax on fuel products passed to tackle Energy sector debt

Parliament has, under a certificate of urgency, approved the Energy Sector Levy (Amendment) Bill, 2025, introducing a new tax of GH¢1 per litre on petroleum products as part of efforts to address the country’s mounting energy sector debt.

The new levy, passed on Tuesday, June 3, is expected to rake in approximately GH¢5.7 billion annually, providing much-needed revenue to clear arrears and stabilize the sector.

Finance Minister, Dr. Cassiel Ato Forson, who presented the bill, revealed that Ghana’s energy sector debt has hit US$3.1 billion as of March 2025.

He said a minimum of US$3.7 billion is required to fully offset these liabilities, with an additional US$1.2 billion needed to secure fuel for thermal power generation throughout the year.

“This levy is critical,” Dr. Forson told the House. “It will allow us to meet our obligations in the energy space while ensuring reliable power supply for households and industries.”

To allay public fears about rising fuel prices, the Minister assured Parliament that the GH¢1 increase per litre would be offset by recent gains made by the Ghana cedi, thereby cushioning consumers from any immediate price hikes at the pumps.

However, the bill did not pass without controversy.

The Minority fiercely opposed it, arguing that the new levy amounts to an unnecessary and unfair burden on already struggling Ghanaians.

Minority Leader Alexander Afenyo-Markin described the move as deceptive, claiming it amounted to a reintroduction of the scrapped Electronic Transfer Levy (E-Levy) under a different name.

“What is Energy? Is it not ‘E’? This is another form of E-Levy disguised as an energy sector levy,” Afenyo-Markin said in Parliament.

Despite the strong opposition, the bill sailed through, paving the way for its implementation in the coming days.

Story by: Joshua Kwabena Smith