The Africa Center for Energy Policy (ACEP) is advocating for a strategic plan to finance the 9.7 billion cedis in petroleum downstream levies allocated for the energy and road sectors, in order to free up these resources for essential development projects.
During a media briefing on downstream petroleum levies, ACEP emphasized the need for a unified approach to collecting petroleum sector margins, which are currently handled by the state and various institutions, to be redirected into tax revenue.
ACEP highlighted that inefficiencies and excessive charges within Ghana’s petroleum sector are major contributors to the heavy burden placed on consumers. They pointed out regulatory margins such as the BOST margin, primary distribution margin, and unified petroleum price fund, which together generate an estimated 7.6 billion cedis annually.
“Government should also prioritize addressing the energy sector debts in the short to medium term, to free up revenues for development purposes. About 9.7 billion Ghana cedis worth of levies are earmarked largely for energy sector and road sector debt servicing. It doesn’t even have to do with anything happening in the petroleum sector.
We are just taking money from consumers to go and shore up some inefficiencies. And work we’ve done also indicates that the ESLA is even now not paying for the debts.
Important as possible, we have to quickly fix the energy sector problems to free up consumers from paying all of these minus into a leaky basket,” Mr. Yaotse said.
Kojo Yaotse, Policy Lead on Petroleum and Conventional Energy at ACEP, noted that reallocating these fuel margins to direct tax revenues could potentially generate an additional 6.3 billion cedis each year.
” The NPA should only be limited to 2 tests, regulating the availability of the product in the market and also ensuring that the standards of the products are met, not to be doubling into all manner of things,” He added.
