‘Dumsor’ levy on fuel officially kicks off today

The controversial GH¢1 ‘Dumsor’ levy on fuel officially takes effect today Wednesday, July 16, as the John Mahama administration pushes ahead with its latest strategy to prevent a resurgence of nationwide power outages.

The Ghana Revenue Authority (GRA), in a statement signed by Commissioner-General Anthony Kwasi Sarpong, confirmed the rollout of the levy under the Energy Sector Levies (Amendment) Act, 2025 (Act 1141).

The levy, which will be charged per litre of fuel at the pump, is aimed at raising funds to stabilize the country’s struggling energy sector, particularly by settling debts owed to Independent Power Producers (IPPs) and ensuring continuous fuel supply for power generation.

The move comes less than a month after a 2.45% hike in electricity tariffs announced by the Public Utilities Regulatory Commission (PURC), which took effect on July 1.

The combined effect of rising electricity costs and the new fuel levy has triggered a wave of criticism and anxiety among Ghanaians already grappling with high inflation and economic hardship.

From Suspension to Implementation

Originally scheduled for June 16, the implementation of the Dumsor levy was postponed following consultations with the Ministry of Finance and the Ministry of Energy, citing volatile global oil prices and the need to preserve gains in domestic pump prices.

However, following what authorities call a “review of prevailing market indicators,” the levy is now set to take full effect.

The GRA insists that the tax is essential to ensure energy security and economic stability.

Government Justifies Levy as Necessary Sacrifice

The Mahama administration has defended the decision, insisting it is a temporary but necessary measure to avoid returning to the days of erratic electricity supply.

Power outages, popularly known as “dumsor”, plagued the country for years—particularly under Mahama’s previous term in office—and had severe impacts on businesses, healthcare, and education.

Government spokespersons argue that without fresh revenue, the energy sector risks collapse, as critical debts and fuel needs remain unmet.

According to the Ministry of Energy, the funds will be used exclusively to purchase fuel for thermal power plants to guarantee continuous electricity generation.

Despite government assurances, opposition groups and civil society organizations have lashed out at what they describe as a burdensome and insensitive policy.

Old Wine In New Bottle

The Minority in Parliament has labeled the levy the “D-Levy”, drawing parallels to the widely unpopular E-Levy that was abolished earlier this year.

Critics accuse the government of repackaging old taxes under new names while doing little to tackle deep-rooted inefficiencies and corruption within the power sector.

“You can’t tax your way out of mismanagement,” an NPP Member of Parliament said in a televised interview.

Public sentiment has also been overwhelmingly negative on social media, with many Ghanaians lamenting the rising cost of living and questioning the transparency of how the funds will be used.

Levy Could Be Reviewed

In response to the backlash, Richmond Rockson, spokesperson for the Ministry of Energy, stated on Joy FM’s Super Morning Show on Monday that the continuation or termination of the levy will depend on how well it performs.

“If the levy delivers the intended results—improved electricity stability and reduced outages—the government will consider scrapping it. If not, we may have to sustain it to protect the energy sector,” he explained.

He hinted that a performance review would be conducted in the coming months to determine whether the levy should be adjusted or withdrawn entirely.

From Wednesday, every Ghanaian who purchases fuel will directly contribute GH¢1 per litre to the government’s energy stabilization fund.

The true test, however, will be whether this measure can deliver the promised results: uninterrupted electricity and an efficient power sector.