All you need to know about the NEW Energy Levy Bill
Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has laid a new bill before Parliament that is already raising eyebrows among citizens and political observers. On Wednesday, June 4, 2025, he presented the Energy Sector Levy Amendment Bill under a certificate of urgency, asking lawmakers to approve a new GH¢1 tax on every litre of petrol, diesel, and other petroleum products sold in the country.
This proposed fuel levy, if approved, would apply directly at the ex-pump level—meaning it affects the final price of fuel at filling stations.
However, Dr. Ato Forson assured Parliament that consumers would not feel the pinch immediately.
According to him, the strong performance of the Ghana Cedi in recent weeks has made it possible to introduce this new tax without increasing fuel prices at the pump—at least for now.
Why the Levy?
The Finance Minister said Ghana’s energy sector is drowning in debt, and this new levy is a necessary step to stop things from getting worse. As of March 2025, Ghana’s total energy sector debt had ballooned to a shocking US$3.1 billion. This includes money owed to:
Independent Power Producers (IPPs)
State-Owned Enterprises (SOEs) like GRIDCo, ECG, and VRA
Fuel suppliers who provide diesel and other fuels to power plants
Dr. Forson described the situation as critical, warning that failure to act now could lead to power outages, financial losses, and even more economic hardship. “We are at a tipping point,” he told Parliament. “The government must intervene urgently to stabilize the electricity supply chain.”
Lost Guarantees, Bigger Problems
One of the reasons for the urgency is the fact that Ghana has exhausted some key financial guarantees meant to cushion the energy sector. Dr. Forson revealed that in 2024 alone, the government completely used up a US$512 million World Bank IDA guarantee and a US$120 million guarantee from GNPC. These guarantees were essential backstops for payment obligations in the power sector.
Now, the country faces a US$632 million shortfall just to restore those financial instruments and gain back investor confidence. Without these guarantees, Ghana may struggle to attract or retain partners in the energy industry, especially the Independent Power Producers who generate a significant portion of Ghana’s electricity.
The Reassurance: “Prices Won’t Go Up – For Now”
Knowing how sensitive Ghanaians are to fuel prices, Dr. Forson took time to reassure the public that the new GH¢1 per litre levy would not lead to an increase in fuel prices immediately. He explained that the recent appreciation of the Ghana Cedi against major foreign currencies, especially the US dollar, had created room for the new tax to be added without changing the current prices at the pump.
“Mr. Speaker, I repeat — the impact will be absorbed by the gains made from the strong performance of the Ghana Cedi. Consumers will not have to pay extra for the price of petrol and diesel beginning today,” Dr. Forson emphasized confidently.
He further explained that simulations and calculations from the Ministry of Finance and the National Petroleum Authority (NPA) showed that the ex-pump prices of fuel would remain stable in the upcoming pricing window—which begins today.
How the Money Will Be Used
To calm fears of misuse, Dr. Forson promised that the revenue from this new fuel levy will be “ring-fenced.” That means it will not go into the general government account, but rather will be kept and used specifically for:
Buying fuel for power generation companies
Paying arrears to power producers
Maintaining stable electricity supply
He explained that many of the companies that generate power do not recover their fuel costs through the electricity tariffs Ghanaians pay to ECG. That financial gap has contributed to the mounting debt. The new levy, he said, is a “strategic intervention” to fix that gap once and for all.
“This is about keeping the lights on. This is about powering businesses, schools, hospitals, and homes. It’s a sacrifice we all must make to avoid a return to ‘dumsor’,” Dr. Forson said, referencing Ghana’s infamous power crisis that broke businesses and frustrated citizens between 2012 and 2016.
Mixed Reactions Already
Though Parliament has yet to debate or approve the bill, the announcement has already generated mixed reactions among the public and lawmakers. Some opposition MPs have accused the government of sneaking in new taxes under the guise of solving national problems.
“The people are already suffering. Food prices are high. Transport is expensive. School fees are not easy. And now they want to put more taxes on fuel?” one MP from the Minority side fumed after the Finance Minister’s address.
However, supporters of the bill argue that electricity is a national security issue and must be protected at all costs. “If the power sector collapses, the whole economy collapses. It’s better to pay GH¢1 now than to spend weeks in darkness,” one MP from the Majority side noted.
What Happens Next?
Because the bill was laid under a certificate of urgency, Parliament is expected to fast-track the review and voting process. The Speaker of Parliament, Rt. Hon. Alban Bagbin, is yet to refer the bill to the appropriate committee, but it is likely to appear before the Finance Committee or the Mines and Energy Committee within the next few days.
If passed, the new GH¢1 per litre levy could come into effect almost immediately. However, as Dr. Forson emphasized, its impact will depend heavily on how long the Ghana Cedi remains strong. Any future depreciation of the currency could still push fuel prices up.
Final Thoughts
This new tax proposal from Dr. Ato Forson comes at a time when Ghanaians are already under economic pressure, with many complaining about high inflation, unemployment, and stagnant wages. But the Finance Minister is asking for national understanding and cooperation, saying this is not just about money—it’s about avoiding a full-scale energy crisis.
Whether Parliament approves the bill or not, one thing is clear: Ghana’s energy sector needs urgent attention, and hard decisions will have to be made. As always, the hope is that those in charge will use the money wisely and transparently, and not waste another opportunity to fix a sector that powers the nation.