Ghana’s Parliament has approved amendments to the Energy Sector Levies Act aimed at improving revenue mobilisation and addressing abuse within the downstream petroleum sector.
Under the amendments, the Energy Sector Shortfall and Debt Repayment Levy on fuel oil will increase from GH¢0.24 to GH¢1.93 per litre, bringing it in line with the rates applicable to diesel and marine gas oil. The Road Fund Levy will also be extended to fuel oil.
The government said the changes are intended to reduce revenue leakages and prevent the misuse of fuel subsidy arrangements designed to support industrial users.
According to authorities, some beneficiaries have exploited the subsidy system for personal gain, weakening the effectiveness of the programme.
Finance Minister Dr. Cassiel Ato Forson said industrial users will now be required to pay the applicable levies when importing fuel oil and subsequently apply for refunds. This replaces the existing system, where eligible users receive tax exemptions before importing the product.
He explained that the revised arrangement is intended to address cases where individuals allegedly purchase diesel, misrepresent it as fuel oil and benefit from the associated tax exemptions.
Dr. Forson stressed that legitimate industrial users will continue to enjoy the tax relief, but the process will shift from an upfront exemption to a refund-based system after payment.
He clarified that the changes do not constitute an increase in taxes on petroleum products, noting that fuel oil is primarily consumed by industrial users rather than motorists.
The government also plans to amend the Revenue Administration Act to reduce the processing period for fuel oil tax refunds from 90 days to 14 days.