Govt needs to focus on energy sector reforms and not impose more taxes

The Executive Director of the Centre for Environmental Management and Sustainable Energy (CEMSE), Benjamin Nsiah, has called on the government to address long-standing inefficiencies within Ghana’s energy sector instead of focusing on short-term fiscal maneuvers.

In remarks made on ABC in the Morning, Mr. Nsiah emphasized that systemic issues draining public funds remain unaddressed while the authorities appear preoccupied with the marginal appreciation of the cedi against the dollar.

He pointed out that rather than solely injecting more resources, the government should tackle the underlying challenges that persistently plague the energy sector.

This appeal comes amid recent developments regarding fuel taxation, as the Ghana Revenue Authority (GRA) has delayed the implementation of the new Energy Sector Shortfall and Debt Repayment Levy.

Initially scheduled for June 9, the levy—which would add GHS1 per litre to fuel prices—has now been postponed until June 16, 2025, following strong opposition from the Chamber of Oil Marketing Companies.

Industry stakeholders voiced concerns over the policy’s timing and its potential to exacerbate fuel price volatility, prompting the GRA to reexamine its approach while retaining the updated rates for specific petroleum products.

In his discussion, Mr. Nsiah also warned that once imposed, taxes on fuel tend to be difficult to retract, highlighting the continuous impact of the GHS1 levy on petroleum prices.

His commentary underscores the urgency for structural reforms that address critical inefficiencies rather than resorting to periodic tax impositions.

The ongoing debate among industry experts and policymakers reflects wider concerns over fuel price stability and the need for comprehensive, long-term solutions in the energy sector.