Ghana’s energy challenges have taken centre stage once again, with the introduction of a new fuel surcharge known as the “Dumsor Levy.” The policy, which adds GH₵1 per litre of fuel, has been introduced under the Energy Sector (Amendment) Act 2025. Its implementation, now postponed to June 16 after stakeholder concerns, has sparked a national conversation around energy reliability, economic hardship, and public trust.
While government officials argue that the levy is essential to rescue the country’s power infrastructure, many ordinary citizens and small business owners are concerned about the timing, affordability, and overall impact on their lives.
Understanding the Rationale
The Dumsor Levy aims to raise funds to address critical issues in Ghana’s energy sector. According to the Ministry of Finance, Ghana is currently facing over US$3 billion in energy sector debt, alongside a pressing need for an additional US$1.2 billion to purchase fuel for thermal power plants. Power generation has been unstable, with frequent outages affecting households and industries.
Government officials claim that the levy will provide the needed fiscal space to address arrears, stabilise the supply chain, and prevent a worsening energy crisis. They argue that although the levy is painful, it is a necessary intervention to prevent longer-term and more disruptive consequences such as prolonged blackouts (dumsor), higher national borrowing, or the collapse of energy utilities.
The Public’s View: The Cost of Living Keeps Rising
From the perspective of many Ghanaians, however, the timing of the levy feels especially difficult. Inflation, though easing compared to previous years, remains high. Food prices, transport fares, rent, and utility bills have already stretched household budgets thin. For most people, an extra GH₵1 per litre translates to a broader increase in living expenses.
While private vehicle owners will feel the immediate pinch at the pump, the effects won’t stop there. The increase in fuel prices is expected to ripple through the economy:
Public transportation fares may rise, impacting daily commuters. Market traders could see higher costs of transporting goods, leading to more expensive food and household items. School fees and services reliant on fuel-powered logistics may also adjust their prices upwards.
The levy, then, is not an isolated fee, it adds pressure on a system already struggling with affordability.
The SME Angle: Higher Costs, Greater Uncertainty
Small and medium-sized enterprises (SMEs), which form the backbone of Ghana’s economy, are especially sensitive to changes in fuel prices. Many SMEs rely on fuel in one way or another:
Shops and retail businesses use generators during power cuts. Delivery services and logistics providers are directly dependent on petrol and diesel to move goods. Hairdressers, barbers, cold store operators, and artisans often operate in areas with unreliable grid power and must supplement with fuel-based energy.
For businesses that operate on narrow profit margins, the levy means either increasing prices (which could drive away customers) or absorbing the cost (which reduces profitability). Neither option is ideal, and many SMEs worry that sustained cost increases could lead to staff reductions, lower output, or even closures.
Yet some business owners also acknowledge the other side: frequent power outages are already costing them more. Inconsistent electricity leads to equipment damage, production downtime, and reliance on expensive backup systems. If the levy can truly stabilise energy delivery and reduce the need for generators, the net benefit could outweigh the initial cost, but that remains a big “if.”
A Policy Dividing Opinion
As with many economic policies, the Dumsor Levy has become a political flashpoint. Members of Parliament’s minority have been vocal in their opposition, labelling the levy as “insensitive,” especially when ordinary Ghanaians are still recovering from years of economic pressure.
Civil society groups have also called for more transparency around how the funds will be used and what accountability mechanisms are in place to prevent mismanagement. Public trust in the electricity sector, particularly the Electricity Company of Ghana (ECG), has been strained by years of inefficiencies and billing controversies.
Transport unions and oil marketing companies, who were expected to begin collecting the levy from June 9, raised concerns about inadequate preparation and the lack of stakeholder consultation. This pressure ultimately led the Ghana Revenue Authority (GRA) to delay implementation by one week to June 16.
While these concerns are valid, some economists and energy experts have supported the policy in principle. They argue that the country’s power system cannot be fixed without significant investment, and that every citizen, in one form or another, has a role to play in solving the energy crisis.
A Wait-and-See Moment
As the Dumsor Levy rolls out, the focus will now shift from debate to delivery. Ghanaians will be watching closely:
Will the levy lead to a more stable and reliable power supply? Will it reduce the country’s dependence on emergency borrowing for energy needs? Will small businesses and households feel any relief in their day-to-day operations?
If improvements in power delivery are visible and sustained, public support may grow over time. But if the levy becomes just another tax with no real impact, it may fuel more disillusionment and public resistance.
Balance Is Everything
Ghana’s energy crisis is not new, and solving it will require tough decisions. The Dumsor Levy is one such decision, a policy born out of fiscal necessity but one that must be managed with care. For many Ghanaians, the burden is real and immediate. For the government, the task now is to ensure that this sacrifice leads to real results.
How the state balances long-term energy reform with short-term affordability could shape not only the fate of this policy, but also the broader public trust in how national challenges are handled.
