Private legal practitioner and governance advocate, Professor Kwaku Asare, has waded into the national conversation on the newly introduced GH¢1 per litre levy on petroleum products, warning that without accountability and structural reform, the policy risks becoming another bailout for elite failure.
In a detailed Facebook post titled “Pair the Levy with Reform & Accountability,” Prof. Asare, popularly known as Kwaku Azar, acknowledged the urgent financial pressures facing Ghana’s energy sector, including a $3.1 billion debt burden, depleted World Bank and GNPC guarantees, and the rising cost of thermal fuel—expenses that are not currently reflected in electricity tariffs.
“The government’s proposed amendment to the Energy Sector Levies Act (2025) is an attempt to stabilize the sector,” he noted. “The rationale is clear… but a critical pillar is missing.”
Levy Alone Not Enough
According to Prof. Asare, the new levy, which is expected to raise between GH¢5–6 billion—roughly 60% of this year’s estimated GH¢1.2 billion thermal fuel requirement—may help avert blackouts, avoid steep electricity tariff hikes, and restore Ghana’s financial credibility with development partners.
However, he cautioned that the social costs are real and immediate arguing that the levy reduces fuel purchasing power for ordinary citizens, adds fiscal pressure to households and businesses, and disproportionately affects the poor.
“This crisis didn’t appear overnight,” he wrote. “It is the result of inflated contracts, procurement abuse, weak financial discipline, and the misuse of previous energy levies. Without accountability, this levy will only reinforce a broken cycle.”
A Reform Blueprint
Kwaku Azar proposed a three-pronged framework for pairing the new levy with meaningful reforms:
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Accountability First
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Launch a forensic audit into the past decade of energy spending.
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Prosecute public and private actors involved in malfeasance.
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Recover misappropriated funds and blacklist corrupt suppliers.
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Transparent, Targeted Use
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Ring-fence proceeds strictly for fuel procurement and debt repayment.
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Mandate quarterly public reports on collections and expenditure.
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Tie energy sector SOE funding to performance metrics.
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Structural Reform and Fiscal Discipline
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Gradually adjust tariffs to reflect actual energy costs.
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Renegotiate predatory Independent Power Producer (IPP) contracts.
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Scale up renewable investments to reduce thermal reliance.
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Make the levy time-bound and subject to measurable targets.
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Require parliamentary reauthorization every two years and cap levy rates unless independently justified.
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Call to Action
“The levy may be necessary, but it is not sufficient,” Prof. Asare stressed. “We cannot be asked to tighten our belts while those who caused the looseness go free.”
He called for the Energy Ministry and the Finance Ministry to present a credible roadmap that restores both power supply and public confidence.
“This is not just about raising revenue. It is about restoring trust. We cannot levy our way out of inefficiency—and we cannot fix a broken system by pouring more money into it without fixing what broke it,” he concluded.
Background
The Energy Sector Levy (Amendment) Bill, 2025, introduces a GHS1 increase in the levy on petroleum products. The measure is expected to generate an additional GHS5.7 billion annually to reduce energy sector debts and ensure a reliable power supply.
The GH¢1 fuel levy, announced by Finance Minister Dr. Cassiel Ato Forson, is part of the government’s effort to close a financing gap in thermal fuel procurement. While government sources insist the levy won’t raise fuel pump prices due to favorable exchange rates, the policy has stirred strong public debate.
Meanwhile, the Ghana Private Road Transport Union (GPRTU) has strongly criticised the government’s introduction of the GHS1 levy hike on petroleum products, describing it as a “blow” to their operations.
In an interview on Citi Eyewitness News on Wednesday, June 4, Industrial Relations Officer of the GPRTU, Alhaji Abass Imoro, expressed disappointment over the government’s decision without prior consultation with the association.
He argued that the move contradicts the expectations they had based on prevailing economic indicators.
“It is going to be a blow to us. We just reduced our lorry fares by 15%…We thought the reduction of the fuel due to the cedi appreciation was going to materialise just for the next day to hear another thing. It is something that we need to get a clear understanding of to know our way forward. One cedi on a litre means a lot for a professional driver because anytime fuel prices are reduced, we get a lot of breathing space.
“They should have engaged us. We, the professional drivers, use the fuel a lot so at least they shouldn’t have forgotten to have any discussion with us,” Imoro noted.
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