Ghc1 Energy Sector Levy Takes Effect Today

The Energy Sector Levy (Amendment) Act, 2025 (Act 1141) officially comes into force today, Wednesday, July 16, 2025, marking a pivotal move by the government to bolster revenue for the energy sector and address long-standing financial shortfalls.

The new levy structure, enforced by the Ghana Revenue Authority (GRA), introduces increased rates under the Energy Sector Shortfall and Debt Repayment Levy (ESSDRL) across multiple petroleum products. The adjustment, which was postponed earlier this year to allow for a review of global oil market trends and protect domestic fuel price stability, has now been greenlit following consultations with the Ministries of Finance and Energy.

According to government sources, the decision to implement the revised levy is aimed at stabilising the economy while simultaneously closing funding gaps in Ghana’s energy sector — especially those related to legacy debts and delayed infrastructure investments.

Key Objectives of the Revised Levy

• Debt repayment: The ESSDRL aims to help service the sector’s multi-billion-cedi debt, much of which has accumulated due to arrears owed to Independent Power Producers (IPPs) and bulk suppliers.
• Infrastructure support: Proceeds from the revised levy will also support critical investment in energy infrastructure to prevent power outages and improve delivery.
• Revenue mobilisation: The levy forms part of a broader fiscal strategy to increase domestic revenue amid tightening global financing conditions.

Though exact figures vary by fuel type, the revised levy is expected to increase the pump price of petrol and diesel by an estimated GHS 1 per litre, contributing to a broader 6–9% hike in fuel prices during the current pricing window.

Industry analysts say the implementation of Act 1141 could generate hundreds of millions of cedis in annual revenue but warn that consumers are likely to feel the pinch, particularly through transport fare hikes and rising costs of goods and services.

Meanwhile, the Chamber of Petroleum Consumers (COPEC) and other civil society organisations have called for greater transparency and efficiency in the use of proceeds, urging the government to ensure that funds raised are ring-fenced for their intended purposes.

The passage and implementation of the Energy Sector Levy (Amendment) Act, 2025, underscores Ghana’s commitment to fiscal consolidation while trying to resolve the energy sector’s long-standing financial instability.

However, observers note that sustained reform and prudent financial management will be critical in ensuring the levy delivers on its promises without disproportionately burdening the average Ghanaian.

Revised ESSDRL Rates Under Act 1141:

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