Gov’t suspends implementation of price Stabilisation and Recovery levy on petroleum products

Government has directed the National Petroleum Authority to suspend the implementation of Price Stabilization and Recovery Levy PSRL on price build up on petroleum products.

This will freeze the implementation of the levy charged on very litre of petroleum products and Kilogram of LPG from Monday April 1 to June 30 2024.

This was contained in a letter from the National Petroleum Authority to the all the players in the oil marketing and distribution space in the country. 

This was based on the directive from the Finance Ministry working with the Energy Ministry. 

Impact

The action could result in Price of Petrol reduced by 16 pesewas in its price build up. Diesel by 14 pesewas and LPG also 14 pesewas per  Kilogram . However there have been productions that prices of petroleum products are expected to go up from April 1 2024.

Therefore this action could slow down the expected margin of increase for prices of the various Petroleum. The letter also stated that this is insulate consumers from paying for higher fuel prices at the pumps based on rising prices on the global market.  

Details of the Levy

The Energy Sector Levies Act 2015 (Act 899) allows  the National Petroleum Authority to PSRL to stabilise petroleum products prices for consumers over the certain period.

It currently charges 16 pesewas per litre on petrol, fourteen pesewas per litre (GHp14/Lt) on diesel, and 14 Pesewas  per kilogram (GHp14/Kg) on LPG.

Government had in recent times used to intervention to cushion consumers of petroleum products. 

That is whenever the prices rise to a certain level, they decide to put its application on hold. However when prices dropped to a certain level and levies are restored.

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