Starting today, July 16, 2025, Ghanaians will begin paying an additional GH₵1 tax per litre of fuel, as the government rolls out a controversial new charge under the Energy Sector Levies (Amendment) Act, 2025 (Act 1141).
The Ghana Revenue Authority (GRA) has confirmed that it will begin collecting the revised levy on petrol, diesel, and other fuel products on that date.
The GRA has issued notices to Oil Marketing Companies (OMCs) and fuel stations across the country, instructing them to update pump prices to reflect the GH₵1 surcharge starting July 16.
The surcharge, introduced as part of broader efforts to reduce mounting debts in the energy sector, had previously been scheduled for implementation on June 9, then June 16, but was postponed twice—most recently in response to rising global crude oil prices following the Israel-Iran conflict.
Levy targets $2.5bn energy debt
The new fuel tax is expected to yield GH₵5.7 billion annually, according to the Ministry of Finance, and forms a critical part of the Energy Sector Recovery Programme, a financial rescue plan to prevent collapse in Ghana’s power supply chain.
It will support state-owned energy firms, including the Volta River Authority (VRA), Ghana Grid Company (GRIDCo), and Electricity Company of Ghana (ECG)—all of which are currently struggling under the weight of legacy debts.
The revenue will be used to pay off arrears to Independent Power Producers (IPPs) and bulk oil distributors, many of whom have issued threats of service cutbacks unless the government settles outstanding debts that now exceed $2.5 billion.
The GH₵1 levy applies to petrol, diesel, and several other petroleum derivatives used in transportation, manufacturing, and domestic power generation.
This latest levy joins a host of other existing fuel-related taxes, including the Energy Sector Recovery Levy, Price Stabilisation and Recovery Levy, and the Energy Sector Levy Act (ESLA)—first introduced in 2015 to restructure energy sector debts.
Public resistance and economic impact
Despite its fiscal intentions, the levy’s passage under a certificate of urgency in Parliament drew strong backlash from the public, opposition legislators, civil society organisations, and transport unions.
Many critics argue that the timing is insensitive to the rising cost of living, and that ordinary Ghanaians are being made to shoulder the burden of government mismanagement and expensive power contracts.
Labour groups and consumer rights advocates have warned of a chain reaction in transportation, food prices, and inflation.
Urban commuters and commercial drivers are already bracing for imminent fare increases, with transport unions expected to announce new rates in the coming weeks.
Govt justifies move
Government spokespersons insist that the levy is a necessary intervention to restore stability to the energy sector and avoid more severe consequences, such as power rationing or systemic collapse.
They argue that energy sector arrears are choking operational liquidity and discouraging private sector investment, posing a direct threat to economic growth and investor confidence.
Officials say the funds raised will also support reforms under the IMF-backed Post-COVID-19 Programme for Economic Growth (PC-PEG) and help unlock new concessional loans tied to energy sector governance benchmarks.
The Ministry of Finance has hinted at the possible quarterly publication of reports on levy proceeds and disbursements to improve transparency and boost public confidence.
As fuel prices edge higher and economic pressures intensify, the new levy may prove a defining test for the government’s fiscal discipline, public engagement, and ability to balance economic recovery with social protection.
