GH₵1 Energy Levy Risks Price Instability, Hurts Transport Sector, Dr. Manteaw Warns

Energy Policy Consultant and Co-Chair of the Ghana Extractive Industries Transparency Initiative (GHEITI), Dr. Steve Manteaw has voiced serious concerns about the new Energy Sector Levy (Amendment) Bill, warning that the new GHS1-per-litre petroleum levy could derail recent gains in price stability and place undue pressure on households and transport operators.

In a Facebook comment following the bill’s passage in Parliament, Dr. Manteaw acknowledged the intentions behind the measure as “well intended,” but criticized its design and accountability structure, warning that without adequate oversight, the levy could be misapplied.

“Too onerous for consumers if placed on a litre of petroleum products, it should rather be placed on a gallon, or reduced to 25 pesewas per litre to moderate its effect on cost of living.” Dr. Manteaw cautioned.

The amendment introduces a GHS1 hike in petroleum levies with the goal of raising GH₵ 5.7 billion to reduce Ghana’s energy sector debt, which currently stands at $3.1 billion. Government argues that this revenue injection is vital to restoring balance in the debt-laden sector and preventing service disruptions.

However, Dr. Manteaw believes the levy could backfire by inflating transport fares and food prices, especially at a time when government officials have been calling on traders to reduce the cost of goods following improvements in the cedi’s performance.

“This new levy risks wiping out the relief that consumers were beginning to feel,” he warned.

Calls for Structural Reform and Time Limits

Dr. Manteaw also raised concerns about the lack of a “sunset clause”, a legal expiration mechanism that would limit how long the levy remains in effect.

“It risks becoming another TOR Debt Recovery Levy, which has outlived its original purpose,” he remarked, referencing a past levy that has remained in place well beyond its intended lifespan.

He advised that the government diversify its financing approach, leveraging macroeconomic tailwinds such as the strengthening cedi and high global prices for gold and cocoa to offset part of the sector’s debt.

“Maybe we should leverage on the gains from the cedi’s resurgence and rising gold and cocoa prices to defray part of the energy sector indebtedness,” he suggested.

Parliamentary Tensions and Legislative Fallout

The bill’s passage did not come without political friction. The Minority caucus staged a walkout, arguing that the Majority lacked the constitutional numbers required for passage. Despite the protest, the bill went through, further deepening partisan divides over economic policy.

As the levy moves into implementation, analysts and civil society will be closely monitoring its real-world impacts on inflation, transportation, and consumer spending areas already under strain from years of fiscal adjustments.

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