Mahama Government Proposes 1% Petroleum Tax to Rescue Energy Sector

The Mahama-led administration has laid a fresh tax proposal before Parliament aimed at imposing a 1% levy on all petroleum products. The move, government sources say, is intended to stabilize Ghana’s ailing energy sector and avert a potential collapse.

The proposed tax was introduced as part of a series of new legislative bills presented to Parliament for approval and subsequent implementation.

Purpose of the Tax

According to government representatives, the tax will apply to every petrol or diesel purchase at the pump, with the funds earmarked to support energy infrastructure, settle legacy debts, and enhance power generation capacity.

A government statement read in Parliament noted:

“Without swift intervention, Ghana’s energy sector risks serious financial insolvency. This levy is designed to protect national interest and guarantee reliable power supply.”

NPP Minority Opposes the Move

The proposed levy has already sparked fierce opposition from members of the New Patriotic Party (NPP) minority in Parliament. They argue that the tax is simply a rebranded version of the controversial Electronic Levy (E-Levy), which the National Democratic Congress (NDC), then in opposition, vehemently rejected.

Critics within the NPP have mockingly dubbed the new petroleum tax the “D-Levy”, hinting at its similarity in burden to the now-unpopular E-Levy. Some political analysts believe that dissatisfaction over the E-Levy contributed significantly to the NPP’s defeat in the December 2024 general elections.

“This is hypocrisy in action,” said an NPP MP. “The same party that campaigned against the E-Levy is now introducing a more regressive fuel tax.”

What Happens Next

The proposed petroleum tax is expected to face parliamentary debate in the coming days. With the NDC holding the majority, the bill stands a strong chance of passing—though the opposition has vowed to challenge it vigorously both in Parliament and in the public discourse.

Public Reaction Looms

As fuel prices already remain high, the reaction from transport unions, businesses, and ordinary consumers is expected to be significant. Several civil society groups are also watching the development closely, raising concerns about inflationary effects and the cost of living.