Mahama Justifies GHS1 Fuel Levy as Key Step Toward Solving Ghana’s Energy Crisis

President John Dramani Mahama has mounted a strong defense of the newly introduced GHS1 fuel levy, describing it as a “necessary but difficult” decision aimed at stabilizing Ghana’s ailing energy sector and avoiding a return to debilitating power shortages.

Speaking at the Jubilee House on Wednesday, June 4, during the presentation of the final report of the 2025 National Economic Dialogue, President Mahama acknowledged the growing public dissatisfaction over the levy but insisted that it is a critical part of a comprehensive plan to restore the sector's financial health.

“This is not an easy step, but it is a responsible and essential one,” Mahama said. “It’s about fixing a broken system and securing Ghana’s energy future.”

The Energy Sector Levy (Amendment) Bill, 2025, which was passed by Parliament under a certificate of urgency on Tuesday, introduces a GHS1 charge on every litre of fuel sold. The move is expected to raise approximately GHS5.7 billion annually, revenue the government says will be ring-fenced and dedicated exclusively to the energy sector.

According to Mahama, Ghana’s energy sector is weighed down by a US$3.1 billion debt, with an additional US$1.8 billion needed to purchase fuel for thermal plants to keep electricity flowing across the country.

“Failure to act decisively now would risk severe consequences for national productivity, industrial growth, and the livelihoods of millions,” the President cautioned.

Mahama stressed that the fuel levy was among the key recommendations that emerged from the National Dialogue, which urged bold fiscal interventions to tackle the sector’s deep-rooted issues. He assured the public that proceeds from the levy will be insulated from political interference and not deposited into the Consolidated Fund.

Instead, the funds will be strictly applied to:

• Clearing longstanding energy sector debts;

• Financing urgent fuel procurement needs; and

• Preventing future electricity supply disruptions.

To enhance accountability, Mahama said the use of the funds will be audited regularly, with reports published for public scrutiny.

“We are fully committed to transparency and fiscal responsibility,” he stated. “This is not just another tax. It is a strategic measure with a clear purpose and oversight.”

President Mahama concluded by calling on Ghanaians to look beyond the short-term burden and embrace the policy as an investment in national energy security and long-term economic stability.

“We understand the concerns, but we urge citizens to support this measure. It is a necessary path to fixing our energy challenges once and for all,” he affirmed.