The Ranking Member of Parliament’s Economy and Development Committee, Kojo Oppong Nkrumah, has urged the government to scrap the GH¢1 per litre fuel levy, citing its potential to trigger fuel price hikes and exacerbate the cost-of-living crisis. In an interview, Mr. Oppong Nkrumah accused the government of railroading the levy through Parliament without proper scrutiny and ignoring warnings about its impact.
The levy, introduced to support Ghana’s struggling power sector, has been met with opposition from the Minority and key stakeholders in the transport and oil industries, who argue it’s poorly timed and harmful to consumers already burdened by rising living costs. He underscored that the government’s assurance that the levy wouldn’t lead to higher fuel prices has proven false, with prices already showing signs of increasing by around 8%, as predicted by the Minority.
There are several key concerns with the fuel levy. The government pushed the levy through Parliament without adequate stakeholder engagement, sparking widespread criticism. The levy is expected to increase fuel prices, further burdening consumers and potentially triggering a cascading effect on commodity prices. Additionally, the levy lacks an exemption threshold, disproportionately affecting low-income earners who can least afford the additional cost.
Mr. Oppong Nkrumah’s concerns echo previous criticisms of the Electronic Transfer Levy (E-Levy), which was introduced by the previous administration. He argues that the fuel levy is even more punitive, with an effective rate that is significantly higher. The Minority has called for the government to reconsider the levy and explore alternative solutions to address the energy sector debt.
