Ghana's Parliament has passed the Energy Sector Levies (Amendment) Bill, 2026. This amendment significantly increases the Energy Sector Shortfall and Debt Repayment Levy on fuel oil from GHS 0.24 per litre to GHS 1.93 per litre. The change aims to strengthen government revenue collection and eliminate abuse within Ghana’s fuel subsidy regime.
The new levy brings fuel oil in line with the existing levy on diesel and marine gas oil. The amendment also extends the Road Fund Levy to fuel oil. These adjustments are designed to close major revenue leakages and tackle tax evasion schemes that have undermined the country’s fuel subsidy programme. This programme is specifically designed to support industrial users.
This legislative action fits into Ghana's broader economic strategy to improve public finance management. The government has consistently sought ways to enhance revenue mobilisation and reduce fiscal deficits. Previous efforts have included various tax reforms and crackdowns on illicit financial flows. This amendment reflects a continued commitment to fiscal discipline and equitable tax collection across economic sectors.
Finance Minister Dr. Cassiel Ato Forson presented the amendment in Parliament. He stated authorities identified widespread abuse involving the misclassification of diesel as fuel oil to benefit from tax exemptions. Dr. Forson explained, “Some individuals are taking advantage and smuggling, buying fuel, buying diesel and disguising it as fuel oil and collecting the taxes on it.” He clarified that industrial users will still receive tax exemptions, but the process will change from an upfront exemption to a refund system.
Under the new arrangement, industries importing fuel oil will pay the applicable levies upfront. They will then apply for refunds, replacing the current system of granting tax exemptions before payment. Dr. Forson emphasized, “You have to pay for it as industry and claim the refund. Fuel oil is not used by motorists; it’s used by industry.” He stressed that the amendment does not introduce any new taxes on petroleum products. Instead, it alters the process through which industries receive their tax exemptions.
The Finance Minister also noted that the Revenue Administration Act will be amended. This will reduce the tax refund processing time for industries buying fuel oil from 90 days to 14 days. This change aims to mitigate any cash flow challenges for legitimate industrial users. Dr. Forson reported that Ghana lost an estimated US$25 million during the first half of 2026 due to abuses within the fuel subsidy regime. He warned that the country could forfeit nearly GHS 1 billion annually if these loopholes are not addressed.
The government believes this amendment will help protect public revenue and improve accountability within the downstream petroleum sector. It will also ensure that fuel subsidies are accessed only by legitimate industrial users. This move is crucial for maintaining fiscal stability and ensuring that public funds are used efficiently. Businesses and market watchers will closely monitor the implementation of these changes and their impact on industrial costs and government revenue targets.