The Chamber of Oil Marketing Companies (COMAC) has raised red flags over the government’s recently approved GH¢1 fuel levy.
The Chamber cautions that the levy could push many downstream petroleum businesses toward insolvency and derail clean energy targets in the country.
In a press release dated June 4, 2025, COMAC expressed worry over the recent passage of the Energy Sector Levies (Amendment) Bill, which raises the Energy Sector Shortfall and Debt Repayment Levy (ESSDRL) by GH¢1 per litre.
The levy applies to petrol, diesel, LPG, naphtha, fuel oil and marine gasoil, raising the cumulative tax burden from 22% to 26% of the ex-pump price according to the oil marketers.
“The cumulative impact of rising taxes, limited margins, and increasing financial obligations threatens the sustainability of many OMCs and LPGMCs within the sector,” Dr. Riverson Oppong, CEO and Industry Coordinator of COMAC said in the release.
A significant number of OMCs/LPGMCs are already burdened by debt, and further fiscal pressure could lead to widespread insolvency, job losses, and broader economic disruption”, he added.
COMAC acknowledged the need to address the country’s energy sector debt, currently exceeding US$3.1 billion, but stressed that the burden of repayment should not come at the cost of business viability and consumer affordability.
“COMAC reaffirms its unwavering commitment to supporting the recovery of the national energy sector, a responsibility OMCs and LPGMCs continue to uphold through consistent remittance under the existing Energy Sector Levies Act. However, this support should not come at the cost of the downstream petroleum industry’s survival, economic competitiveness, or consumer protection, especially considering structural inefficiencies, mismanagement, and shortfalls within the power and electricity sectors”, the statement read in parts.
Effective June 1, 2025, the statutory levies per litre for petrol alone now total GH¢ 4.27 up from GH¢ 3.27, with the ESSDRL component jumping from 95 pesewas to GH¢ 1.95.
The increase, COMAC noted, was introduced without adequate stakeholder consultation, despite the sector’s strategic importance and contribution.
According to COMAC, most Oil Marketing Companies (OMCs) and Liquefied Petroleum Gas Marketing Companies (LPGMCs) are already operating with thin and shrinking margins in a deregulated and highly competitive environment.
“Any future rise in international Brent crude prices will compound cost pressures. With limited flexibility, marketers would be forced to pass on higher costs to consumers—potentially triggering up to a 5% drop in demand, especially among smaller players,” COMAC added.
COMAC also criticised the inclusion of LPG under the revised ESSDRL.
It described it as counterproductive to Ghana’s target of achieving 50% LPG penetration by 2030.
The Chamber warned that rising LPG prices could force low-income households to revert to biomass fuels, undermining the government’s Cylinder Recirculation Model (CRM), public health and environmental sustainability goals.
It is therefore demanding an immediate engagement with the Ministry of Energy and Green Transition, and other relevant agencies, to explore more balanced, evidence-based policy solutions.
“We urge government to collaborate with industry stakeholders to ensure that fiscal policy decisions reflect operational realities – protecting business survival, promoting energy equity, and advancing Ghana’s development agenda,” the statement concluded.
Industry players are warning that without responsive policymaking, gains made in price stability and energy reforms may be at risk as a result of this levy.
Source: Citinewsroom