Mahama Orders Finance, Energy Ministers to Remove Taxes on Fuel amid Surge in Oil Prices
- President John Mahama has directed tax cuts on fuel to tackle rising prices after an emergency Cabinet meeting
- The Iran war disrupts crude oil supply with the closure of the Strait of Hormuz, causing steep petrol price hikes globally
- The finance and energy ministers have been tasked to remove taxes on petroleum products within a week
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President John Mahama has directed the energy and finance ministers to take steps to remove taxes on fuel products amid the increasing petroleum prices.
The decision was taken at an emergency Cabinet meeting held on April 9.
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Fuel prices have seen a spike because of the disruption to the crude oil supply chain brought on by the Iran war.
Of particular impact has been the closure of the Strait of Hormuz to most sea traffic, a critical global oil shipping route.
Per a press briefing at the presidency, Mahama tasked Minister for Finance Dr Cassiel Ato Forson and Minister for Energy John Jinapor to engage stakeholders within the energy sector to explore the removal of certain taxes and levies on petroleum products.
The proposed measures are expected to take effect from the next pricing window, on April 15
The hike in fuel was being passed on to other services that Ghanaians depend on.
For example, the Ghana Private Road Transport Union had threatened to hike transport fares because of the increase in fuel prices. Increased transport fares also translate to increased fuel prices.
The most recent fuel tax was the imposition of a GH¢1 tax on every litre of fuel bought.
Forson said the increase in taxes was necessary to clear the alarming US$3.1 billion energy debt as of the end of March 2025.
The US$3.1 billion debt includes significant arrears owed to Independent Power Producers (IPPs), various State-Owned Enterprises (SOEs), and crucial fuel suppliers.
Parliament eventually approved the Energy Sector Levy (Amendment) Bill, 2025, introducing the GH¢1 levy on petroleum products.
Effect of Iran war on fuel supply
Iran has effectively stopped tankers from using the Strait of Hormuz, the shipping lane between the Persian Gulf and the Gulf of Oman.
Attacks on merchant ships near the strait have killed at least seven sailors, according to the International Maritime Organisation.
Source: Original
AP reported that US President Donald Trump also assured threatened intensified action on Iran if the country made any “attempt to stop the globe’s oil supply.”
After the recent ceasefire in the war, benchmark Brent and WTI contracts dropped by 13% and 16% respectively to below $100 a barrel, as investors bet on the reopening of the Strait of Hormuz and a reduced geopolitical risk premium.
Bawumia slams Mahama government over increased tax
YEN.com.gh reported that Former Vice President Dr Mahamudu Bawumia criticised the government for raising the tax on petroleum products.
Bawumia also accused the Mahama administration of campaigning on deceptive promises because of the introduction of what he called a dumsor levy.
He believes this increased tax is more costly than the scrapped Electronic Transfer Levy.
Source: YEN.com.gh
