Fuel Levy: I know it’s difficult but necessary – Mahama explains

President John Dramani Mahama has justified his administration’s decision to introduce a new levy on petroleum products, describing it as a “difficult but necessary” step to stabilize the economy and secure funding for vital national projects.

On Monday, Parliament approved a new law that imposes a GHS1 levy on every litre of fuel sold in the country.

Addressing the public at the Jubilee House on Tuesday during the presentation of the final report of the 2025 National Economic Dialogue, President Mahama acknowledged public unease about the new tax measure but maintained that it is a sound and essential policy.

“This was not a decision we took lightly,” he said. “Though difficult, it is necessary and justifiable.”

The President clarified that revenue from the petroleum levy would not be deposited into the traditional Consolidated Fund. Instead, he explained, the funds would be protected from the risks associated with the consolidated pool and would be dedicated specifically to purposes such as energy infrastructure and shielding the economy from external shocks.

He added that this approach is intended to ensure the levy achieves its purpose without being diverted for unrelated expenditures.

President Mahama also committed to taking strong measures to fix persistent inefficiencies in the petroleum sector. He signaled the government’s intention to improve transparency, enforce tighter oversight, and ensure proper accountability to guarantee that every cedi delivers value.

Although the levy is projected to slightly increase fuel prices at the pumps, officials have emphasized that the long-term economic gains—including greater financial stability and stronger energy systems—will outweigh the short-term impact on consumers.

The new levy comes amid growing pressure on the government to reduce the national budget deficit, block revenue leakages, and find sustainable domestic solutions for funding development programs, rather than relying heavily on loans.

Despite public doubts, President Mahama expressed confidence that citizens will eventually recognize the rationale behind the policy.