The Petroleum Downstream Sector Reforms Committee (PDSRC) has recommended the immediate scrapping of the premix fuel subsidy, citing entrenched mismanagement and corruption.

In a report sighted by the Ghana News Agency (GNA), the committee said the subsidy had failed to serve its intended purpose of supporting artisanal fishers but had become a conduit for diversion and illicit sales.

They proposed that savings from abolishing the subsidy should be redirected towards the development of fishing communities, ensuring real benefits reach the intended beneficiaries.

The report describes the premix fuel sector as “marred” by systemic diversion and mis-selling of subsidised fuel at the pump.

It highlights that the governance issues surrounding the distribution and usage of premix fuel have undermined its core objectives: stabilising petroleum prices and supporting fisherfolk.

A regional breakdown of consumption from 2023 to the first quarter of 2024 revealed worrying trends, the report said

The Northern and former Bono regions, which have minimal legitimate use for premix fuel, recorded dramatic consumption spikes of 322 per cent and 190 per cent, respectively.

In contrast, traditional coastal fishing regions like Western (-4 per cent), Central (21 per cent), and Greater Accra (13 per cent) recorded far lower increases, suggesting large-scale smuggling and diversion.

The report stated, “Almost all the GHS 680 million in annual revenues accrued from the Price Stabilisation and Recovery Levy (PSRL) is siphoned through the premixed fuel subsidy by cronies, without direct benefits to fisherfolk.”

The PSRL, introduced in 2015 under the Energy Sector Levies Act (Act 899), was designed to stabilise fuel prices, subsidise premix and residual fuel oil, and cushion petroleum-related shocks. Since its inception, Ghanaians have paid over GH¢3 billion into the fund.

However, the committee noted that only a fraction of this amount had been used for its intended purposes. Notably, the levy has never been applied to stabilise the prices of other fuel types.

The committee’s call adds to growing demands from civil society and energy policy think tanks for reform.

The Africa Centre for Energy Policy (ACEP) has long advocated for the scrapping of the premix subsidy, citing inefficiency, endemic corruption, and growing national debt.

Similarly, the Environment and Natural Resource Research Initiative (NRRI) has argued that ending the subsidy is necessary to protect marine ecosystems and promote sustainable fishing practices.