The Africa Sustainable Energy Centre (ASEC) has condemned the government’s newly introduced GH¢1 fuel levy, describing it as a measure that places more financial burden on citizens while ignoring the core problems of Ghana’s energy sector.

In a press release issued on 4 June 2025, ASEC said the levy is “a short-sighted measure that targets citizens rather than addressing structural weaknesses in the energy sector.” The Centre warned that the GH¢1 charge, which will be added to every litre of fuel, would worsen inflation and affect the cost of essential goods and services.

“Fuel is a cornerstone of Ghana’s economy. From agriculture and transportation to food distribution, the cost of fuel drives the price of nearly every essential good and service,” the statement said. “The new levy would increase this burden without delivering any solution to the core issues affecting the sector.”

ASEC stressed that the government should focus on fixing structural inefficiencies within the Electricity Company of Ghana (ECG) rather than introducing more taxes.

According to the Centre, the root causes of the crisis include outdated infrastructure, poor and inconsistent revenue collection, illegal power connections, and both technical and administrative losses.

“Before introducing new taxes, we must ask: why are we failing to collect what is already due?” ASEC questioned. It called on the government to prioritise transparency, digital reforms, and efficiency in the management of the energy sector instead of “shifting the cost of systemic failures to consumers.”

The Centre also raised concerns over how funds from existing energy-related levies have been used, particularly the Energy Sector Recovery Levy. It noted that these funds are sometimes diverted to unrelated projects.

“These funds, often reallocated to other infrastructure projects, should be used for their intended purpose, stabilising the energy sector,” the statement read. “Misapplication not only dilutes their impact but also erodes public trust.”

Citing the words of the Finance Minister, ASEC said: “We must not reward inefficiency with higher tariffs.”

The organisation added, “We strongly believe that this principle should apply equally to taxation. Introducing a new fuel levy, in the absence of reforms, only rewards inefficiency and delays the much-needed transformation of the sector.”

According to ASEC, Ghana’s energy sector is currently building up liabilities of about $70 million every month. The Centre warned that these debts would keep rising unless bold reforms are made. It called for urgent steps, including operational reform of ECG, investment in smart metering and digital infrastructure, stronger regulatory oversight, elimination of losses, and proper use of all energy-related funds.

“We may need to weed out the bad nut from the system, or else all efforts of the government will be sabotaged,” ASEC warned. “The time for decisive leadership and systemic reform is now. Let’s fix the system, not just the symptoms.”