Fuel prices soar as government levies rake in billions – Report

A new report from the Africa Centre for Energy Policy (ACEP) has revealed an increase in fuel-related levies and margins imposed by the Ghanaian government, leading to increased fuel prices for consumers.  

The report by the energy think tank highlighted that while the government collected over GH¢9.7 billion annually in petroleum taxes, a significant portion was earmarked for debt servicing, leaving limited resources for development.   

The report noted that a range of regulatory margins, including the BOST Margin, Primary Distribution Margin (PDM), Unified Petroleum Price Fund (UPPF), and the Cylinder Recirculation Model (CRM) margin, generated a substantial GH¢7.6 billion annually.  

These margins, paid by consumers, have witnessed a surge between 2019 and 2024, with increases ranging from 247 percent to 429 percent.   

The report criticised the PDM, which was levied regardless of whether the state-owned Bulk Oil Storage Company (BOST) is utilized for transportation, as “disingenuous” given that over half of petroleum products bypassed BOST altogether.  

Concerns were also raised in the report regarding the Price Stabilization and Recovery Levy (PSRL), with a portion used to subsidize premixed fuel while the remainder remained unaccounted for.  

The report further pointed out that BOST, initially tasked with strategic stockpiling, had ventured into the petroleum import market through the Gold for Oil programme, deviating from its core mandate.  

The report noted that the Fuel Marking Margin, intended to ensure fuel quality and revenue assurance, is also under scrutiny.   

The report said that the proliferation of the proprietary marking chemical in the market undermined the purpose of the levy.  

Finally, the report highlighted the substantial subsidy of nearly GH¢400 million annually for the Cylinder Recirculation Model (CRM), which aims to promote LPG usage.   

It noted that subsidy was levied on all LPG consumed, regardless of whether it was through the CRM or the conventional model.  

Source: GNA 

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