Fuel Levy Sparks Public Outcry, But Mahama Defends Move as Crucial for Energy Stability

The Mahama administration is facing intense public criticism after introducing a new GH¢1 fuel levy, a move many see as a betrayal of earlier promises not to burden Ghanaians with additional taxes.

Economic analyst John Kusi Narh voiced the frustration of many, accusing the government of breaching public trust. In an interview with 3news.com, Narh said, “Why do you break the trust of the people like this? You gave your word not to increase taxes, only to impose a new fuel levy within months. This isn’t just about economics—it’s about credibility.”

The discontent follows earlier assurances from Finance Minister Dr. Cassiel Ato Forson, who, during his vetting on January 13, said there was no immediate need to raise taxes. He argued that Ghana had significant untapped potential in tax revenue mobilisation and emphasized improving compliance over introducing new levies. “We don’t necessarily have to increase taxes before we rake in revenue,” he stated at the time.

However, Parliament on Tuesday, June 3, passed the Energy Sector Levy (Amendment) Bill, 2025 under a certificate of urgency, approving the new GH¢1-per-litre tax on petroleum products. The measure is expected to generate around GH¢5.7 billion annually, earmarked to address ballooning energy sector debts and sustain thermal power generation.

In response to the backlash, President John Dramani Mahama defended the policy on Wednesday, June 4, during the presentation of the National Economic Dialogue 2025 final report at Jubilee House. He described the levy as a “difficult but necessary” step to rescue the energy sector from collapse.

“This decision, though unpopular, is essential,” Mahama stated. “It forms part of a comprehensive plan to tackle the over US$3.1 billion energy sector debt and to secure the $1.8 billion needed for critical fuel procurements.”

The President warned that failure to act now could reignite the country’s power crisis and hamper productivity across industries. He also addressed concerns over the use of the funds, promising that the revenue would be ring-fenced, kept separate from the Consolidated Fund, and subjected to regular audits with publicly disclosed reports.

“We are committed to transparency and accountability,” Mahama assured. “These funds will be used solely to stabilize the energy sector, not for general government spending.”

Despite the assurances, the move has drawn criticism from opposition voices and members of civil society who believe the administration is backpedaling on key fiscal promises. Still, Mahama appealed for national support, insisting that the levy is a strategic solution to a long-standing crisis.

“We understand the public’s frustration, but this is a responsible path forward,” he concluded. “This is not just a tax—it is an investment in energy security and future economic stability.”

As Ghanaians begin to feel the impact of the new fuel pricing structure, the government’s handling of the revenue—and its ability to deliver tangible improvements in energy supply—will determine whether the public can be convinced that the sacrifice is worthwhile.