Tax analyst Francis Timore Boi has questioned the timing and long-term sustainability of the government’s decision to temporarily suspend selected taxes and margins on petroleum products to reduce fuel prices in Ghana.
The Cabinet directive, which instructs the Ministers of Finance and Energy to implement the measure for an initial four-week period, is aimed at easing pressure on households and businesses amid recent fuel price fluctuations driven by global crude oil movements.
Speaking in an interview, Mr. Boi said while the policy objective was understandable, its timing may be premature given current market conditions.
“It is a necessary intervention. However, I would describe it as a little premature,” he said.
“The reason I am saying this is we are seeing too much volatility in the prices of crude oil on the world market.”
He warned that reacting too quickly to short-term price movements could create fiscal risks for the government, especially if crude prices remain within a manageable range in the medium term.
“When prices are swinging, you risk reacting to temporary spikes… and that could cause some sustainability issues,” he added.
Mr. Boi also cautioned that frequent government interventions in fuel pricing could distort market expectations and encourage assumptions that the state will continually absorb external shocks.
He noted that while lower fuel prices could help reduce transport fares and ease inflationary pressures, the policy could also reduce government revenue and create future fiscal pressures.
“We were here when COVID-19 came… immediately we got out of the pandemic, the government had to come back and look for money to cover up,” he said, warning that similar post-intervention fiscal adjustments could re-emerge if revenue gaps widen.
He further argued that the government should have observed several pricing windows before acting, stressing that while the intention of the policy is positive, the timing remains his main concern.
