Dr. Eric Effah-Donyina, an energy expert, has described the newly implemented GH¢1 fuel levy as a “necessary evil,” citing the country’s mounting energy sector debt as justification for the policy.
Speaking on Morning Starr with Joshua Kodjo Mensah on Wednesday, July 16, Dr. Effah-Donyina acknowledged the rationale behind the Energy Sector Levy but questioned the scope of its application.
“one Ghana cedi levy on fuel is a necessary evil”, he said, “The energy sector is carrying a lot of legacy debt, and nobody wanted it to happen so, but it has happened. And largely we believe that it happened as a result of partly the inefficiencies of the ECG and the inherent nature of power distribution in our part of the world.”
He noted that while the levy is expected to support debt repayment, it is also being directed toward stabilizing infrastructure and purchasing fuel for generators—an area he believes raises concerns.
“So the one cedi levy is supposed to assist us to clear that debt. But if you listen to what the president said when the levy was being introduced, and what the energy minister said, as well as what the finance minister said, we are going to pay this money not only to clear the legacy debt of about 3.1 billion U.S. dollars in the power sector, but also to keep the infrastructure stable, and also to support the power generators to purchase fuel. And that’s where I have some concern,” Dr. Effah-Donyina argued.
Meanwhile, the Ghana Revenue Authority (GRA) has officially begun enforcing the revised Energy Sector Levy on petroleum products, effective today, Tuesday, July 16, 2025.
The levy, which adds GH¢1 per litre to the cost of key petroleum products, is part of the Energy Sector Shortfall and Debt Repayment Levy (ESSDRL). It aims to generate funds to offset debt and ensure reliable supply in Ghana’s power sector.
Revised Levy Breakdown
| Product Description | Common Name | Old Rate (GH¢) | New Rate (GH¢) |
|---|---|---|---|
| Motor Spirit Super | Petrol (PMS) | 0.95 | 1.95 |
| Gas Oil | Diesel (AGO) | 0.93 | 1.93 |
| Marine Gas Oil (Local) | MGO – Local | 0.03 | 0.23 |
| Marine Gas Oil (Foreign) | MGO – Foreign | 0.93 | 1.93 |
| Heavy Fuel Oil | Residual Fuel Oil | 0.04 | 0.24 |
The government has reiterated that proceeds from the levy will be used to address energy sector shortfalls, settle arrears, and enhance the reliability of electricity supply across the country.
Source: Starrfm.com.gh
