Parliament Passes Energy Sector Levies Bill 2026 to Tackle Fuel Tax Evasion and Subsidy Abuse

Parliament has approved the Energy Sector Levies (Amendment) Bill, 2026, introducing significant changes to close tax loopholes, prevent abuse of fuel subsidies, and strengthen revenue collection in Ghana’s downstream petroleum sector.

The legislation amends the Energy Sector Levies Act, 2025, by increasing the Energy Sector Shortfall and Debt Repayment Levy on fuel oil from GH¢0.24 per litre to GH¢1.93 per litre, bringing it in line with the levy charged on diesel and marine gas oil.

In addition, the amended law extends the Road Fund Levy to fuel oil, a move the government believes will help eliminate tax avoidance and improve transparency in the petroleum industry.

Presenting the Bill to Parliament, Finance Minister Dr Cassiel Ato Forson explained that some importers have been exploiting the existing tax regime by importing diesel but falsely declaring it as fuel oil to enjoy lower tax rates.

According to him, the fraudulent practice has reduced government revenue while limiting access to fuel oil for legitimate industrial users who depend on the product for production.

Dr Forson said the amendment introduces a new refund system designed to maintain tax relief for industries while preventing abuse.

Under the new arrangement, companies importing fuel oil for industrial use will pay all applicable levies upfront before later applying for a refund, replacing the previous system where tax exemptions were granted before importation.

He stressed that the reform changes the timing of the exemption rather than eliminating it.

“Some individuals are taking advantage and smuggling, buying diesel and disguising it as fuel oil to benefit from tax exemptions. We will continue to support industries with these tax exemptions, but instead of receiving them before importation (ex-ante), they will now receive them after payment (ex-post) through a refund process,” Dr Forson told Parliament.

The Finance  Minister further assured Ghanaians that the amendment does not introduce new taxes on petroleum products.

He explained that fuel oil is primarily used by industries rather than motorists, and the government’s objective is to protect genuine manufacturers while preventing fraudulent claims.

To make the new system more efficient, the government will also amend the Revenue Administration Act to reduce the processing period for tax refunds on industrial fuel oil purchases from 90 days to just 14 days.

Government believes the reforms will safeguard fuel subsidy programmes, curb tax evasion, enhance accountability, and ensure that incentives meant for industries benefit the intended recipients rather than being exploited for private gain.

The Energy Sector Levies Bill 2026 is expected to strengthen revenue mobilisation while improving the integrity of Ghana’s petroleum tax and subsidy framework.