Ghana’s recent fuel price relief may bring temporary comfort to consumers, but it fails to address a deeper, more persistent issue within the country’s petroleum pricing system.
That’s the view of Ben Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP), who argues that while the government’s decision to reduce fuel levies is a step in the right direction, it does not go far enough to fix structural inefficiencies.
Speaking on the matter, Boakye described the intervention as “thoughtful,” noting that it helps cushion consumers against rising global oil prices. However, he stressed that the real challenge lies not just in high fuel costs, but in the layers of opaque charges embedded in the system.
According to him, Ghana’s downstream petroleum sector has gradually evolved into a complex web of margins and levies, many of which lack transparency and clear economic justification. Instead of functioning as efficient tax tools to fund development, he believes some of these charges serve narrow political interests.
“In many parts of the world, petroleum taxes are used to fund critical infrastructure like transport systems and social programmes,” he explained. “But here, we’ve accumulated charges that don’t necessarily support development.”
Boakye singled out the Uniform Petroleum Price Fund (UPPF) and the Primary Distribution Margin (PDM) as particularly problematic. While the UPPF was designed to ensure uniform fuel prices across the country, he argued that it has become overly interventionist and lacks a clear, data-driven basis.
He pointed out that the UPPF margin has increased significantly over the years without a transparent formula to justify the adjustments. In his view, the situation has reached a point where domestic fuel distribution costs appear disproportionately high.
“It now costs more to move fuel within the country than to import it from Europe,” he said, describing the situation as a misuse of regulatory trust.
Boakye is calling for a more fundamental reform of the system. Rather than maintaining these margins in their current form, he suggests cutting them significantly and converting part of the savings into clearly defined tax revenue. This, he believes, could then be directed toward visible national development projects.
He estimates that even a modest, transparent levy could generate billions of cedis annually if properly structured and accounted for, providing funding for infrastructure and public services.
Beyond the economic argument, Boakye also raised concerns about governance and accountability. He dismissed claims that reducing these margins would hurt oil marketing companies, insisting that the main beneficiaries of the current system are politically connected intermediaries rather than industry players.
He alleged that some fuel transport and distribution contracts are awarded to individuals with political ties, who then subcontract the work while retaining a portion of the revenue.
His concerns extend to the lack of transparency surrounding the UPPF. Boakye revealed that despite repeated requests for information under the Right to Information framework, details about how the fund is used have not been disclosed.
For him, this raises serious questions about accountability and the true purpose of the charges consumers continue to pay at the pump.
