Parliament approves GH¢1 fuel levy hike to clear energy sector debts
Parliament has approved the Energy Sector Levy (Amendment) Bill, 2025, introducing a GH¢1 increase in the levy on petroleum products.
The measure is expected to generate an additional GH¢5.7 billion in revenue to help reduce energy sector debts and stabilise power supply.
This was after Finance Minister, Dr. Cassiel Ato Forson introduced the Energy Sector Levy (Amendment) Bill, 2025 in Parliament under certificate of urgency.
During the approval process, the Minority Caucus opposed the levy and staged a walkout. They argued that the Majority lacked the required numbers to take a decision on the bill.
The move is part of a broader government plan to tackle the country’s ballooning energy sector debt and ensure a stable power supply throughout the year.
This latest development follows years of persistent financial strain within Ghana’s energy sector, which has been plagued by legacy debts, under-recovery of costs, and challenges with fuel procurement for power generation. The sector's fragile state has contributed to occasional power supply disruptions, raising public concern and investor unease.
Dr. Forson explained the urgency of the proposed measure, pointing out that the country needs to mobilize substantial resources to prevent a total collapse of the energy system.
“A minimum of $3.7 billion is needed to clean up the overall energy sector’s indebtedness for us to have a clean slate. In the year 2025, the government will require an additional $1.2 billion to procure essential fuel for thermal power generation alone. The power sector risks imminent collapse if these unsustainable debts are not resolved,” he said.
While the proposed GH¢1 increment in the levy is expected to affect the ex-pump price of diesel, petrol, and other related fuels, Dr. Forson assured Ghanaians that this adjustment would not lead to increased costs at the pump, thanks to the recent appreciation of the Ghanaian cedi.
“The government is proposing an increase in the X pump price of diesel, petrol, and related products. The impact will be absorbed by the gains made from the strong performance of the Ghana cedi. And this will mean that consumers will not have to pay extra for the price of diesel and petrol, beginning today, June 3,” he said.
The amendment bill has been laid before Parliament and is expected to go through the necessary legislative processes, including scrutiny by the Finance Committee.
The proposed increase, though technical in nature, comes at a politically sensitive time, as the government balances the need for fiscal responsibility with the burden on citizens already grappling with a high cost of living.