ASEC advises gov’t to scrap GH¢1 fuel levy amid global oil volatility

The Africa Sustainable Energy Centre (ASEC) has renewed its opposition to the government’s proposed GH¢1 fuel levy, warning that recent developments in the global oil market underscore the dangers of anchoring fiscal policy on temporary market conditions.

ASEC maintains that the proposed levy—whose implementation has since been suspended—is ill-timed and unsustainable, particularly in light of the volatile nature of global energy prices.

The think-tank first raised concerns earlier this year, arguing that introducing the levy during a period of marginal fuel price decline, largely driven by cedi appreciation, was both premature and ill-advised.

“Short-term price dips must not form the basis for permanent tax policies,” ASEC stated.

It explained that global oil prices have since risen to US$74–US$75 per barrel, driven largely by geopolitical tensions. This, the Centre argues, reaffirms the risks associated with the proposed levy, which could quickly become counterproductive as external shocks reverse any perceived consumer relief.

ASEC’s latest analysis suggests that fuel prices at the pump are expected to rise in the coming weeks, with any current reductions likely to be short-lived. Should the levy be implemented, itl warns that prices could approach GH¢15 per litre by July, further straining household and business budgets.

“Government goodwill earned from recent economic stabilisation efforts risks being eroded by growing public discontent,” ASEC noted.

It called for a more strategic, long-term policy direction that focuses on structural reforms, sustainable investments, and diversified revenue streams within the energy sector—rather than shifting the burden onto consumers.

“The GH¢1 fuel levy should be scrapped entirely. In an era of global uncertainty, policy decisions must be flexible, data-driven, and prioritise the welfare of citizens, the organisation concluded,” the statement concluded.

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