The Minority in Parliament has raised concerns over the government’s decision to increase the fuel oil levy from GH¢0.24 per litre to GH¢1.93 per litre, arguing that the move will create additional financial pressure on businesses and households without effectively tackling fuel smuggling.
The increase, which was introduced through amendments to the Energy Sector Levies framework, is aimed at addressing revenue losses linked to fuel smuggling and subsidy abuse. However, the Minority believes the government should rather strengthen monitoring systems and enforcement measures to prevent illegal fuel activities.
Speaking during parliamentary debate on the Energy Committee’s report on the levy, Tano North MP, Dr Gideon Boako, argued that increasing taxes would only burden law-abiding businesses while smugglers continue to operate.
“Once the hunter has learnt to shoot without missing, the bird also goes flying without perching. So there is no justification or indication that if we introduce additional tax, the smuggling will stop,” he said.
Dr Boako questioned why the government had not placed greater emphasis on technology-driven solutions such as electronic tracking and improved monitoring systems to identify and stop fuel smuggling.
He further explained that although companies would be responsible for paying the levy, the cost would eventually be passed on to consumers through increased prices of goods and services.
“If a company or a manufacturing company relies on fuel oil for boilers, generators or industrial heat, any additional cost by way of this tax will be passed on to the consumer,” he said.
The legislator warned that the policy could affect inflation reduction efforts by raising production expenses and weakening consumers’ purchasing power.
“At a time that Ghana is talking about lower inflation, we should not, by the introduction of a new bill, do anything that has a cascading effect on inflation,” Dr Boako added.
The Minority maintained that closing revenue leakages and improving enforcement would be a more effective approach than placing additional taxes on businesses and consumers.
