A group of fishermen at work
The Petroleum Downstream Sector Reforms Committee (PDSRC) has recommended the immediate scrapping of the premix fuel subsidy, citing entrenched mismanagement and corruption.
In a report sighted by the Ghana News Agency (GNA), the committee stated that the subsidy had failed to achieve its intended purpose of supporting artisanal fishers, and had instead become a conduit for diversion and illicit sales.
The committee proposed that savings from abolishing the subsidy be redirected towards the development of fishing communities to ensure that the intended beneficiaries receive tangible support.
The report described the premix fuel sector as “marred” by systemic diversion and mis-selling of subsidized fuel at the pump.
It emphasized that governance issues surrounding the distribution and use of premix fuel had undermined its core objectives: stabilizing petroleum prices and supporting fisherfolk.
A regional breakdown of consumption from 2023 to the first quarter of 2024 revealed troubling trends, according to the report.
The Northern and former Bono regions—areas with minimal legitimate use for premix fuel—recorded dramatic consumption spikes of 322 percent and 190 percent, respectively.
In contrast, traditional coastal fishing regions such as Western (-4 percent), Central (21 percent), and Greater Accra (13 percent) recorded far lower increases, suggesting large-scale smuggling and diversion.
The report stated: “Almost all of the GHS 680 million in annual revenues accrued from the Price Stabilization and Recovery Levy (PSRL) is siphoned through the premix fuel subsidy by cronies, without direct benefits to fisherfolk.”
The PSRL, introduced in 2015 under the Energy Sector Levies Act (Act 899), was designed to stabilize fuel prices, subsidize premix and residual fuel oil, and cushion petroleum-related shocks. Since its inception, Ghanaians have contributed over GHS 3 billion to the fund.
However, the committee noted that only a fraction of this amount has been used for its intended purposes. Notably, the levy has never been applied to stabilize the prices of other fuel types.
The committee’s recommendation adds to growing demands from civil society organizations and energy policy think tanks for reform.
The Africa Centre for Energy Policy (ACEP) has long advocated for the elimination of the premix subsidy, citing inefficiency, endemic corruption, and the burden of growing national debt.
Similarly, the Environment and Natural Resource Research Initiative (NRRI) has argued that ending the subsidy is necessary to protect marine ecosystems and promote sustainable fishing practices.