Fix power sector debt accumulation to avoid persistent increase in petroleum taxes - ACEP advices gov’t

The Africa Centre for Energy Policy (ACEP) has advised government to urgently fix the debt accumulation in the power sector to avoid the persistent increase in petroleum taxes.

This advice follows the recent increase in levies on petroleum products by Gh30pesewas in the national budget.

A statement from the National Petroleum Authority (NPA) last month to industry players indicated an increment of Ghc47pesewas per litre on petrol and diesel.

In the communique, the NPA disclosed that the increase is as a result of the Introduction of Sanitation and Pollution Levy of GHP10 per litre on petrol/diesel and a further adjustment of the Energy Sector Recovery Levy by GHP20, as well as the increase in some margins on petroleum products

The initial increment of GHP47 has now been revised downwards by GHP8 after public agitation and subsequent stakeholder meeting with the Minister of Energy on 4th May 2021.

In a press release from ACEP on the back of public outcry, government needs to commit to critical review of the object of all the agencies and companies in the energy sector to ascertain the relevance of each of them under the portfolio of government business to cut waste and translate tax and margins to development outcomes.

While ACEP stresses that it is committed to reviewing the historical track record of these agencies to promote discussion on the appropriate tax burden on consumers, it want all the increments on the margins recently imposed by NPA be scrapped.

“Government must fix the debt accumulation in the power sector to avoid the persistent increase in petroleum taxes to pay energy sector debt.”

Meanwhile, ACEP is also urging the NPA to investigate the coincidental adjustment of OMC margins and demonstrate to the good people of Ghana how it intends to prevent anticompetitive behaviour in the downstream sector.

Find below the full release from ACEP: