GH¢1 fuel levy will collapse our businesses – Oil marketers lament

Story By Grace Tsotsoo Quaye On June 4, 2025, 10:23 AM

The Chamber of Oil Marketing Companies (COMAC) has raised serious concerns regarding the recent government approval of a GH¢1 fuel levy.

COMAC warns that this levy might drive numerous downstream petroleum companies toward bankruptcy and undermine the country’s clean energy objectives.

In a press release issued on June 4, 2025, COMAC expressed its distress over the passage of the Energy Sector Levies (Amendment) Bill, which increases the Energy Sector Shortfall and Debt Repayment Levy (ESSDRL) by GH¢1 per litre.

This levy will affect petrol, diesel, LPG, naphtha, fuel oil, and marine gasoil, raising the overall tax burden from 22% to 26% of the ex-pump price, according to the oil marketers.

Dr. Riverson Oppong, CEO and Industry Coordinator of COMAC, stated, “The cumulative impact of rising taxes, limited margins, and increasing financial obligations threatens the sustainability of many OMCs and LPGMCs within the sector”.

“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.

As of June 1, 2025, the statutory levies on petrol alone have increased from GH¢ 3.27 to GH¢ 4.27 per litre, with the ESSDRL component rising from 95 pesewas to GH¢ 1.95.

COMAC noted that this increase was implemented without sufficient consultation with stakeholders, despite the sector’s vital role, contributing 6% to Ghana’s economy.

The organisation pointed out that most Oil Marketing Companies (OMCs) and Liquefied Petroleum Gas Marketing Companies (LPGMCs) are already functioning on narrow and declining margins in a deregulated and fiercely competitive market.

“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.

Additionally, COMAC condemned the inclusion of LPG in the revised ESSDRL, labeling it counterproductive to Ghana’s goal of achieving 50% LPG penetration by 2030.

“We urge the 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.