Removing GH₵1 fuel levy now could worsen energy sector debt - IES
Smith Prosper Boahene, a Senior Research and Policy Analyst at the Institute for Energy Security (IES), cautioned against calls to scrap the GH₵1 fuel levy on Wednesday, March 25, on JoyNews. He insisted that doing so now would be "premature." He stated, "IES from the commencement has been against it; that call is premature."
Boahene argued that the levy is critical to addressing Ghana's long-standing energy sector debt. Global crude oil prices have dipped by about 5%, falling from around $104 per barrel to approximately $98.95, while gas prices in Europe have also declined by roughly 8%. The government's recent payment of a $500 million guarantee to the Bank of Ghana was cited as evidence of efforts to revive the sector. He warned that removing the levy could lead to under-recoveries that would eventually be passed on to consumers.
Instead of removing the GH₵1 levy, the IES is proposing the temporary suspension of the Price Stabilisation and Recovery Levy (PSRL). He noted that similar interventions were implemented in 2021 and 2024 to cushion consumers.
Quick Summary
The Institute for Energy Security (IES) is in disagreement with calls to remove the GH₵1 fuel levy. IES insists that doing so would be "premature" - but what could be the repercussions?
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