….Dr. Razak Opoku Slams GH¢1Levy as Misleading & Harmful
The implementation of a newly approved GH¢1 levy on every litre of petroleum has been met with sharp criticism from political analyst and policy advocate, Dr. Razak Kojo Opoku, who argues the move contradicts key commitments made in the 2025 Budget Statement presented by Finance Minister Dr. Cassiel Ato Forson. In a strongly worded critique, Dr. Opoku, Founding President of UP Tradition Institute, described the tax as inconsistent with the Mahama administration’s stated economic priorities, warning it could worsen the cost of living and undermine public trust in the government’s fiscal agenda.
Dr. Opoku highlighted multiple contradictions between the fuel levy and promises captured in the 2025 Budget, such as the planned review—not increase—of the Energy Sector Levies Act, as well as assurances to support businesses and reduce price instability.
He questioned the economic rationale behind simultaneously abolishing levies like the E-levy, VAT on vehicle insurance, and the Emissions Levy—only to introduce a flat fuel tax that disproportionately affects the poor and small businesses reliant on transportation.
Citing sections of the budget document, including projected arrears of over $1.7 billion to Independent Power Producers and GH¢68 billion owed by ECG, Dr. Opoku stressed that the new levy was not previously flagged in any of the government’s stated energy recovery plans.
He warned that the move risks eroding disposable income, damaging business competitiveness, and exposing the 2025 Budget Statement as deceptive and out of step with its own policy framework.
Below is his full statement:
1 Cedi Dumsor-Levy Inconsistent with Mahama’s 2025 Budget Statement and Economic Policy
In the 2025 Budget Speech, we were told by Hon. Dr. Ato Forson in section 6(Page 2) that, Mahama’s government will be seeking to review a number of Acts including the “Energy Sector Levies Act, 2015(Act 899)” but nothing was said about the introduction of GHS 1 tax on every litre of fuel after the amendments to Energy Sector Levies Act.
The pricing of goods and services in Ghana is largely influenced by fuel prices and exchange rate instability particularly fuel prices.
According to Section 27(Page 7) of the 2025 Budget Speech, Hon. Dr. Ato Forson indicated that, “Mr Speaker, the extensive consultations (with traders as captured in Section 26 of 2025 Budget Speech, Page 7) revealed that the overriding concern among Ghanaian traders and the business community, remains price and exchange rate instability”.
If we may recall, Mahama’s government asked traders and the business community to reduce prices for goods and services simply because of the recent Cedi Appreciation, so now, how would the traders and the business community adjust the pricing of goods and services in response to the GHS 1 tax on every litre of fuel since transportation is going to be expensive?
In section 56(Page 13) of the 2025 Budget Speech, we were informed that, the central government has arrears/payables of $1.73 billion owed to the Independent Power Producers(also reiterated in Section 84 Page 18 of 2025 Budget Speech), and GHS 68 billion owed by the Electricity Company of Ghana(ECG) coupled with Energy Sector Financing Shortfall of GHS 35 billion for 2025 as mentioned in Sections 80-83(Pages 17-18) of the 2025 Budget Speech under the headline of “Energy Sector Fiscal Risks”.
However, if you read about the “2025 Energy Sector Measures” in Section 136(Pages 38-39) of the 2025 Budget Speech, there is absolutely nothing about the implementation of a tax policy of GHS 1 on every litre of fuel to address DUMSOR as part of the Energy Sector Recovery Programme Interventions.
In Section 137(Page 39), Mahama’s government indicates to Ghanaians that:
(i). PURC will continue to implement the Quarterly Tariff Adjustment to reflect changes in inflation, exchange rate, and generation mix;
(ii). PURC will also undertake the major Tariff Adjustment which will be due in the 4th quarter of 2025 to reflect capacity charges, additional liquid fuel usage, and additional capex.
The question many Ghanaians are asking Mahama’s government is that, would the GHS 1 on every litre of fuel co-exist with the aforementioned measures by PURC?, and how would that be deemed as fairness to the Ghanaian people especially the traders, business community and various households?
Another important question to Mahama’s government is that, does it make economic sense in Section 141(Page 41) of 2025 Budget Speech to:
- Abolish Emission Levy on industries and vehicles, and 3 months later start the implementation of GHS 1 tax on every litre of fuel?
- Abolish VAT on motor vehicle insurance policy, and 3 months later start the implementation of GHS 1 tax on every litre of fuel?
- Abolish the Electronic Transfer Levy(E-levy) of 1%, and 3 months later start the implementation of GHS 1 tax on every litre of fuel?
Make no mistake, tax on fuel would significantly affect the wellbeing and quality of life for the poor masses than tax on MoMo transactions.
The implementation of GHS 1 tax on every litre of fuel clearly has defeated the claim of Mahama’s government in Section 142(Page 41) of 2025 Budget Speech. The introduction of GHS 1 tax on every litre of fuel will increase the burden on households, completely erodes their disposal incomes, and in addition, undermine the growth of businesses as well as decrease tax compliance.
Indeed, the GHS 1 tax on every litre of fuel has seriously exposed Mahama’s 2025 Budget Statement and Economic Policy as a “Significant Lies”, and I said so because it is stated in Section 152(Page 43) of the 2025 Budget Speech that, “without increasing the levy, we will also review the Energy Sector Levies Act(ESLA) to consolidate the Energy Debt Recovery Levy, Energy Sector Recovery Levy(Delta Fund), and Sanitation & Pollution Levy into one levy and use the proceeds to cater for the energy sector shortfalls and service the inherited debt service obligation”.
….. Signed….
Razak Kojo Opoku (PhD)
Founding President of UP Tradition Institute
