The government’s decision to introduce a new fuel levy under the Energy Sector Levy Amendment Bill 2025 has ignited widespread controversy, with legal analyst Richard Dela Sky warning that the move punishes citizens for decades of institutional mismanagement in Ghana’s energy sector.
The amendment, which adds an extra GH₵1 per litre on petrol and diesel, is being justified by the government as necessary to address a looming $2.23 billion energy sector shortfall and a legacy debt of $3.1 billion.
Officials argue the strengthened cedi and falling global fuel prices provide “fiscal space” to impose the hike without burdening consumers.
However, for Dela Sky, this policy is emblematic of failed leadership, a lack of reform, and a preference for expedient solutions.
“This is not policy—it is artifice. It is not prudence—it is expediency. And it warrants the strongest possible objection. The move sparked immediate controversy, with Minority lawmakers staging a dramatic pre-vote walkout in protest.
“This parliamentary revolt underscored their characterization of the levy as yet another regressive energy sector burden disproportionately affecting ordinary Ghanaians. Given the New Patriotic Party’s own checkered fiscal legacy of relentless tax impositions, such criticism rings with profound irony.”
Richard Dela Sky
According to the government, the extra fuel levy will ensure timely payments to power producers and fuel suppliers, restore credibility in the sector, and provide financial liquidity, however, Dela Sky questioned the sincerity and coherence of these justifications.
He argued that a strengthened cedi should have brought down overall consumer costs, not increased them.
Yet, instead of passing on relief, the Public Utilities Regulatory Commission approved a 14.75% electricity hike and a 4.02% rise in water tariffs—further tightening the screws on households.“If reliable power is the objective, where are the efforts to modernise the grid, combat electricity theft, reform procurement, and introduce structural accountability?”
Dela Sky pointed out that between 2016 and 2025, the government collected GH₵29 billion through the Energy Sector Levies Act (ESLA), yet the sector remains in crisis.
If that enormous sum failed to stabilise the industry, he indicated, then this additional cedi is not a solution—it is an admission of defeat. “It will raise revenue. But it will also raise living costs, exacerbate inequality, and deepen public disillusionment.”
Fuel Levy Slammed As Shortcut, Not Reform
Meanwhile, President Mahama defended the move, stating that this decision, though difficult, is necessary.
However, Dela Sky countered that difficulty alone does not validate a policy. Without serious reform, transparency, and justification, he argued, this tax is simply the path of least resistance.
Equally troubling is the way the levy was introduced. Rather than engage citizens or stakeholders in meaningful dialogue, the amendment was rushed through Parliament using a certificate of urgency.
No hearings, no town halls, and no sectoral briefings preceded the tax that will now impact millions of fuel consumers.
“This is not consultation—it is coercion disguised as governance,” Dela Sky said, adding that such exclusionary policymaking undermines the legitimacy of governance in a democratic republic.
“The most egregious aspect of this levy is not its rate, but its permanence. There is no sunset clause, no performance targets, no pledge of repeal. History teaches us that taxes introduced in crisis seldom retreat—they endure. What assurance do Ghanaians have that this levy will be any different?
“Governance, if it is to mean anything, must transcend mere survival tactics. It demands institutional rehabilitation, accountability, and the courage to lead with transparency—not the convenience of taxation without scrutiny.”
Richard Dela Sky
Drawing on the views of the Chamber of Petroleum Consumers (COPEC), Dela Sky amplified warnings that the levy could backfire.
COPEC’s Executive Secretary, Duncan Amoah, called the tax “potentially counterproductive” and likened it to “pouring water in a leaking bucket.”
Rather than focusing on revenue, Amoah urged the government to address sectoral inefficiencies—highlighting, for example, the Electricity Company of Ghana’s (ECG) 32% loss rate and opaque fuel procurement processes.
The Institute of Climate and Environmental Governance (ICEG) also condemned the levy, calling it “unjust and deeply unfair.”
ICEG argued that the burden would fall heaviest on low-income households and demanded the creation of an independent Energy Sector Stabilization Authority, along with a full accounting of the GH₵29 billion previously collected under ESLA.
According to Dela Sky, both COPEC and ICEG make clear that no tax can resolve the energy crisis without comprehensive reform.
Still, the government continues to defend the fuel levy, citing favourable economic conditions.
However, Dela Sky challenged this logic, noting that if fuel prices were to rise again or the cedi were to weaken, citizens would be left without a safety net.
Energy Sector Overhaul Urged
Moreover, Richard Sky proposed that the government should learn from private sector models. For instance, Enclave Power Company, a private operator, has managed to maintain distribution losses at just 2.5% since 2015—compared to ECG’s staggering 32%.
This example, he argued, shows the power of performance-based incentives and private-sector discipline, yet the government persists in shielding ECG and NEDCo from meaningful reform while demanding more from struggling Ghanaians.
Quoting William Lyon Mackenzie King, Dela Sky reminded readers: “The politician’s promises of yesterday are the taxes of today.”
But he stressed that this is not a call for tax avoidance or a rejection of civic responsibility—it is a call for accountable governance.
“The citizen must not serve as the shock absorber for every institutional failure that has persisted for decades. Ghana’s power sector is not collapsing because the people have not paid enough—it is collapsing because the State has not done enough to merit what it demands.”
Richard Dela Sky
Accordingly, he argued that in the absence of structural reforms, transparent safeguards, and a defined plan for repeal, the levy fails to provide a credible solution—serving only to extend a pattern of dysfunction disguised as urgent action.
His opposition, he emphasized, stems not from outrage but from a deep commitment to democratic principles: that citizens are not mere subjects, and taxation imposed without consultation or accountability undermines the very foundations of responsible governance.
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