By Daniel Bampoe
President John Dramani Mahama has mounted a strong defence of the controversial GHS1 increment in Ghana’s fuel levy, describing it as an unavoidable step to prevent further deterioration in the country’s energy sector.
The president made the remarks on Wednesday, June 4, during the presentation of the final report from the National Economic Dialogue Planning Committee at the Jubilee House.
The levy, which forms part of the recently amended Energy Sector Levy Bill, 2025, has sparked criticism from sections of the public and civil society.
However, President Mahama insisted that the decision, while difficult, was both “necessary and justifiable” to stabilize the energy sector and safeguard economic growth.
According to the president, the increment is expected to raise approximately GHS5.7 billion annually.
These funds, he assured, would be ring-fenced—used exclusively for critical interventions in the energy sector.
“This revenue will be strictly used to pay down legacy debts, finance ongoing fuel purchases, and avert the risk of recurring power shortages,” he explained.
Sector in Crisis
Ghana’s energy sector has long struggled with financial instability, exacerbated by over $3 billion in accumulated debts owed to independent power producers and fuel suppliers.
This debt overhang has constrained the operations of major utility companies like the Electricity Company of Ghana (ECG) and the Volta River Authority (VRA), leading to sporadic power outages and limited capacity for infrastructure expansion.
In 2025, the Mahama administration tabled the Energy Sector Levy (Amendment) Bill before Parliament to address these long-standing issues.
The bill proposed several revenue-enhancing measures, with the GHS1 fuel levy standing out as the most publicly impactful. It was eventually passed in early June 2025 amidst fierce debate.
Political and Public Backlash
The introduction of the GHS1 fuel levy has drawn backlash from opposition political parties and some consumer advocacy groups, who argue that the move would further burden the ordinary Ghanaian.
Though pump prices have not immediately increased due to adjustments in existing price stabilization mechanisms, critics fear the knock-on effects on transport fares and the cost of goods.
In response, President Mahama reassured the public that his government had considered the economic implications carefully before implementing the policy.
“We understand the burden this places on citizens, but doing nothing would be far more costly in the long run,” he said.
Broader Economic Agenda
The levy increment is part of a broader national economic agenda under the Mahama administration’s “Resetting Ghana” programme, which aims to restore macroeconomic stability, improve public sector efficiency, and enhance infrastructure development.
During the economic dialogue, the president also announced plans to establish an inter-ministerial committee to oversee the implementation of policy recommendations drawn from the stakeholder engagements.
