Ghana’s Parliament has approved the Energy Sector Levy (Amendment) Bill, 2025, introducing a GH¢1 levy on petroleum products.
Finance Minister Dr Cassiel Ato Forson introduced the controversial amendment bill on Tuesday, 3 June 2025. The bill proposes a new levy on petroleum products as part of an urgent strategy to resolve the country’s deepening energy sector debt.
The Energy Sector Levy (Amendment) Bill, which was presented to Parliament under a certificate of urgency, aims to address a staggering US$3.1 billion in energy-related liabilities as of March 2025.
According to Dr Forson, the proposed tax hike on petrol, diesel, and related petroleum products is vital to raise the funds required to stabilise the power sector. He assured lawmakers that the new levy would not result in an immediate increase in fuel prices at the pump. This is largely attributed to the recent strong performance of the Ghanaian cedi, which has helped absorb potential inflationary effects.
In 2024, Ghana fully drew down a US$512 million World Bank IDA guarantee and a US$120 million GNPC guarantee. These financial buffers have now been exhausted, and the government urgently needs US$632 million to restore them.
Dr Forson explained that the levy is expected to help fill this gap by generating additional revenue for energy-related needs, particularly fuel procurement.
The Minister outlined the critical state of the energy sector, highlighting unpaid bills owed to Independent Power Producers (IPPs), state-owned enterprises, and major fuel suppliers, including companies such as ENI and Karpowership. These arrears have significantly strained power generation and delivery.
The proposed levy is not just a short-term measure. It is intended to serve as a dedicated funding stream for the power sector, specifically allocated to the purchase of fuel required for continuous electricity generation.
The Minister maintained that this move strikes a delicate balance between ensuring uninterrupted electricity for Ghanaian households and businesses while working towards the long-term financial sustainability of the country’s energy sector.
