Gov't explains suspension of GH¢1 fuel levy

The implementation of the controversial fuel levy under the Energy Sector Levies (Amendment) Act, 2025 (Act 1141) has been put on ice, as government signals it will only take effect when global conditions become more favourable.

The decision follows a directive from President John Dramani Mahama instructing the Ministers of Energy and Finance to delay the rollout and continue monitoring market trends closely before committing to a new timeline.

Confirming the development, Richmond Rockson, Public Relations Officer of the Ministry of Energy, said the administration is determined to protect recent gains at the pump and avoid burdening consumers already grappling with high living costs.

“The President has directed the Ministers of Energy and Finance to keep monitoring the situation. So they will keep monitoring, and as and when the factors look favourable, definitely a new date will be announced,” he stated.

Initially set to take effect on June 16, the fuel levy — which imposes GH¢1 on petrol, GH¢1 on diesel, and 20 pesewas on liquefied petroleum gas — was shelved due to worsening global energy market conditions.

“I can confirm that the government of Ghana, as issued by the GRA, has postponed the implementation of the Energy Sector Levies (Amendment) Act, 2025 (Act 1141). This levy is what has introduced GHS1 on petrol, GHS1 on diesel and 20 pesewas on gas. So yes, I can give you that confirmation,” Rockson said.

He noted that Ghana had benefited in recent months from falling pump prices, thanks largely to a stable cedi and sound exchange rate policies that helped drive fuel costs down from highs of around GH¢17 per litre to between GH¢11 and GH¢12.

But those gains are now under threat. A fresh spike in international oil prices — driven by heightened tensions between Iran and Israel — has seen crude surge from $60 to $74 per barrel within just 72 hours.

“In fact, the last three days, if you check crude oil prices on the international market, it moved from $60 to $74, and this is the highest we’ve seen in the past five months,” Rockson revealed. “This has also caused some disruptions in our private module.”

With geopolitical risks rattling the oil markets, the government appears to be taking a cautious stance, weighing the economic impact before implementing any new levies that could fuel public outcry and economic strain.

The new date for the levy’s introduction remains undecided — and will hinge on how global oil prices and domestic conditions evolve in the coming weeks.