The Minority in Parliament has criticised the government’s decision to sharply increase the fuel oil levy. They describe the measure as an ineffective solution to fuel smuggling. Moreover, they say it could worsen economic pressures on businesses and consumers.

Under the new adjustment, the levy has been increased from GH¢0.24 per litre to GH¢1.93 per litre. This is part of amendments to the Energy Sector Levies framework. Government says the move will help recover revenue losses caused by smuggling. In addition, it will address subsidy-related abuses.

However, the Minority argues that higher taxation is not the answer. Instead, they insist that the focus should be on stronger enforcement. They further recommend better compliance monitoring and improved systems to track fuel movement.

Contributing to discussions on the Energy Committee’s report, Tano North MP Dr Gideon Boako said the policy would unfairly affect legitimate businesses. Furthermore, he said it will fail to deter smugglers.

“Once the hunter has learnt to shoot without missing, the bird also goes flying without perching. So there is no justification or indication that if we introduce additional tax, the smuggling will stop,” he said.

Dr Boako questioned why the government had not invested more in digital tracking systems and electronic monitoring tools. These tools, he said, could help identify leakages in the fuel supply chain.

He argued that while companies would officially pay the increased levy, the actual cost would ultimately be absorbed by consumers. This would occur through higher prices.

“If a company or a manufacturing company relies on fuel oil for boilers, generators or industrial heat, any additional cost by way of this tax will be passed on to the consumer,” he said.

The MP cautioned that the levy increase could have wider economic consequences by increasing production costs. This would affect prices and slow progress in reducing inflation.

“At a time that Ghana is talking about lower inflation, we should not, by the introduction of a new bill, do anything that has a cascading effect on inflation,” Dr Boako added.

The Minority reiterated its position that improving enforcement and reducing fuel sector leakages would provide a lasting solution to smuggling. This, they said, is preferable to increasing the tax burden on citizens and businesses.