Benjamin Nsiah, the Executive Director of the Center for Environmental Management and Sustainable Energy, has stated that the government’s decision to consolidate three energy sector levies will not be sufficient to cover the shortfall in debt recovery.
The Finance Minister recently announced the merging of the Energy Sector Debt Recovery Levy, Energy Sector Recovery Levy, and the Sanitation and Pollution Levy in a bid to simplify revenue collection and allocate the proceeds to address energy sector shortfalls and service outstanding debts.
Mr. Nsiah has urged for the identification of an alternative funding source to fully address the debt recovery gaps.
” Government is trying very hard to sustain the debt in the power sector, and that is by consolidating some 3 levies in the energy sector, that is, the energy debt recovery levy, the energy sector recovery levy, and the sanitation and pollution levy. The summation of these levies gives us about 79 pesewas, on the build-up; if you look at our volumes, we’re doing around 5 billion in litres of fuel as a country.
So consolidating that particular levy will give us about 4.2 billion cedis in 2025 as against our shortfall of about 35 billion, so there’s still a problem in terms of financing, and the energy sector shortfall. We would have thought the government would have allocated additional funds to offset the sector.”
Mr. Nsiah added that the 2025 budget did not touch on the petroleum downstream, especially in the wake of unstable fuel prices.
Mr. Nsiah said, ” With respect to some of the challenges facing the downstream, in terms of stability of prices, the Minister made mention of continuing the auction policy. But beyond the auction policy, we believe that given cheaper dollars to the importers of petroleum products, the BDCs must translate to the actual pricing of petroleum products”
