Gov’t proposes ¢1 fuel levy to save power sector
By Praisebell Rosemond Larbi
The Government of Ghana is seeking parliamentary approval to introduce a GH¢1 Energy Sector Levy on petroleum products, as part of urgent efforts to rescue the country’s debt-laden energy sector and secure uninterrupted power supply.
Finance Minister Dr. Cassiel Ato Forson on Tuesday, June 3, 2025, laid before Parliament the Energy Sector Levy (Amendment) Bill, 2025, which seeks to amend current provisions in the Energy Sector Levies Act to accommodate the proposed increment.
Presenting the bill on the floor of Parliament, Dr. Forson explained that the government urgently requires at least $3.7 billion to settle arrears and outstanding debts across the energy value chain, adding that an additional $1.2 billion will be needed to procure fuel for thermal power generation throughout 2025.
Mounting Debt Threatens Power Supply
“The power sector risks imminent collapse if these unsustainable debts are not resolved. A minimum of $3.7 billion is needed to clean up the overall energy sector’s indebtedness for us to have a clean slate,” Dr. Forson lamented.
He further noted that the reliability of thermal power generation hinges on the government’s ability to secure adequate fuel, stressing that failure to address these financial shortfalls could lead to recurrent power outages and long-term instability in energy delivery.
“In the year 2025, the government will require an additional $1.2 billion to procure essential fuel for thermal power generation alone,” the Minister disclosed.
Impact on Pump Prices
Addressing potential public concerns over the impact of the levy increase on pump prices, Dr. Forson assured Parliament that the GH¢1 upward adjustment in fuel levies would not result in higher fuel prices for consumers.
According to him, the recent strengthening of the Ghanaian cedi has created a cushion capable of absorbing the additional cost, thus preventing any direct price hikes at the pumps.
“The government is proposing an increase in the ex-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. This will mean that consumers will not have to pay extra for the price of diesel and petrol, beginning today, June 3,” he stated.
A Balancing Act
The Energy Sector Levy (Amendment) Bill forms part of a broader fiscal and energy recovery strategy designed to address legacy debts, restore financial health within the energy sector, and ensure consistent power supply to drive economic growth.
The government’s proposal comes amid ongoing concerns about the long-term viability of Ghana’s power sector, which continues to grapple with accumulated debt to Independent Power Producers (IPPs), fuel suppliers, and other energy sector actors.
Industry observers have described the proposed levy adjustment as a necessary intervention, although some have warned that it must be managed transparently and paired with improved efficiency and accountability in the use of proceeds.
Parliament is expected to debate and consider the bill in the coming days.
