₵1 Fuel levy necessary— Analyst
By Rebecca Okine
Economic analyst Emmanuel Boateng has said the new GHS1 fuel levy, which took effect on Tuesday, July 16, 2025, was expected and reflects the government’s effort to address deep-rooted inefficiencies in the energy sector.
Speaking on Business Breakfast on Zed FM, Mr. Boateng noted that the levy’s introduction should not come as a surprise.
The government had signaled its intention a month earlier but delayed implementation due to public concerns.
“They tried introducing it and had to go back, but eventually it is here,” he said, describing the levy as “well grounded.”
The levy, implemented under the revised Energy Sector Levies Act of 2025 (Act 1141), was confirmed through a Ghana Revenue Authority directive (Tariff Interpretation Order No. 2025/003).
It imposes a GHS1 per liter charge on petroleum products an amount that Mr. Boateng said effectively increases pump prices by about 8 percent.
While the flat rate is the same for all consumers, Mr. Boateng stressed that the economic burden would not be evenly distributed.
“If you earn GHS5,000 and pay one cedi per liter, and someone earns GHS10,000, the effect on your net income will be different,” he explained, noting the tax’s impact varies based on income and fuel consumption.
The economic analyst further pointed out that those who do not own private vehicles, like himself, may not pay the levy directly at the pump but would likely feel its effects through higher public transport fares.
“Our only hope is that transport fares don’t go up,” he stated, referencing recent inflation data showing a drop in transportation costs.
Mr. Boateng also welcomed the government’s earlier decision to scrap fuel allowances for political appointees, arguing that such measures could result in fiscal savings.
“The money that would have gone into fueling vehicles under that allowance can now be redirected to more productive uses,” he noted.
Despite the inconvenience, he urged the public to consider the broader picture.
“The levy is meant to fix a long‑standing problem. If the government is sincere in its intentions, we need to support this,” Mr. Boateng said.
He also referenced international practices where taxes and levies fund critical public infrastructure and services.
Mr. Boateng admitted that many Ghanaians may not fully grasp the real cost of inefficient energy practices until they begin to see how taxes like this one are utilized.
“You may think it’s just one cedi per liter, but when you calculate it across thousands of commuters or consumers in a day, the sums become significant,” he stressed.
Ultimately, Mr. Boateng believes the levy, although unpopular, is a step in the right direction if the funds are used responsibly.
“It’s about discipline, reform, and fixing a sector that has been broken for too long. Let’s hope the savings are not just political optics but are channeled into real improvements in the energy sector,” he added.
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