The government’s decision to maintain a GH¢2-per-litre reduction in diesel prices is creating a financial burden of more than GH¢500 million every month on Ghana’s downstream petroleum sector, according to the Chairman of the New Patriotic Party (NPP) Policy Co-ordination Committee, Kojo Oppong Nkrumah.
Mr Oppong Nkrumah said the intervention was effectively shifting the cost of keeping diesel prices lower from government revenues to institutions and operators whose statutory margins had been suspended.
He estimated that the affected margins amounted to GH¢519.12 million monthly, based on average diesel consumption of about 259.56 million litres.
When the implied support to the Unified Petroleum Price Fund (UPPF) is factored in, he said the monthly financial exposure could rise to nearly GH¢683 million.
According to him, about GH¢2.076 billion in revenues due to the Bulk Oil Storage and Transportation Company Limited (BOST), distributors, fuel-marking operations and the UPPF had been withheld across April, May, August and September 2026 without replacement.
He warned that while consumers may be enjoying temporary relief at the pumps, the underlying financial obligations were accumulating elsewhere in the petroleum sector.
BOST Faces GH¢31.15m Monthly Shortfall
Mr Oppong Nkrumah said the suspension of the 12-pesewa-per-litre BOST Energy Margin had resulted in an estimated monthly revenue shortfall of GH¢31.15 million.
The margin supports the maintenance and operation of BOST’s storage tanks, pipelines and depots, as well as the expansion of petroleum infrastructure.
He argued that suspending the margin did not eliminate BOST’s operational responsibilities, warning that prolonged revenue shortfalls could lead to deferred maintenance, unpaid suppliers, delayed projects and increased borrowing.
Distributors, Fuel-Marking Operations Hit
The Primary Distribution Margin of 26 pesewas per litre has also been suspended, resulting in an estimated monthly revenue loss of GH¢67.49 million, according to Mr Oppong Nkrumah.
He said the margin supports the movement of petroleum products between depots and warned that withholding it could leave distributors struggling to finance essential operations.
The suspension of the nine-pesewa-per-litre Fuel Marking Margin is also estimated to have created a monthly revenue shortfall of GH¢23.36 million.
Mr Oppong Nkrumah warned that weakening funding for fuel-marking operations could put additional pressure on a system designed to combat smuggling, adulteration and revenue leakages.
UPPF Faces GH¢397m Pressure
The biggest component of the financial pressure, he said, involved the UPPF, which is managed by the National Petroleum Authority (NPA).
He estimated the UPPF-related component at GH¢1.53 per litre, translating into approximately GH¢397.13 million.
The fund compensates petroleum transporters for the additional cost of transporting products from depots to distant parts of Ghana, helping to maintain relatively uniform fuel prices nationwide.
Mr Oppong Nkrumah warned that reducing revenue flowing into the fund while maintaining its obligations could place significant financial pressure on the NPA and petroleum transporters.
Diesel Could Cross GH¢18 Per Litre
Mr Oppong Nkrumah further warned that rising international petroleum prices and a weaker cedi could push diesel above GH¢18 per litre, even with the GH¢2 intervention.
He said international diesel prices had risen 4.85%, while the cedi had weakened by 0.88%.
Without the intervention, he estimated that the underlying price of diesel could exceed GH¢20 per litre.
He said the government therefore faced a difficult choice between maintaining the GH¢2 reduction and accumulating more than GH¢500 million in monthly downstream obligations, or withdrawing the intervention and exposing consumers to higher pump prices.
Use Oil Windfall to Fund Fuel Relief
Rather than suspending statutory margins, Mr Oppong Nkrumah urged the government to use part of what he described as additional petroleum revenue generated from higher crude oil prices to finance the intervention.
He noted that the 2026 Budget was based on a crude oil benchmark price of US$76.22 per barrel, but crude prices had climbed significantly above that level during the year.
Based on his calculations, the government could have generated an additional GH¢8 billion to GH¢9 billion in petroleum-related revenue.
He therefore argued that part of the additional revenue should be used to cushion consumers instead of withholding funds required by BOST, the NPA and other downstream institutions.
Mr Oppong Nkrumah also proposed suspending selected petroleum taxes and levies rather than statutory margins.
He cited the Energy Sector Shortfall and Debt Repayment Levy, which he said generates GH¢1.93 per litre of diesel, arguing that the amount was almost equivalent to the GH¢2-per-litre relief currently being provided.
He maintained that reducing government taxes would make the true cost of the intervention visible in the national budget while allowing Parliament and the public to scrutinise the expenditure.
Warning Over New Energy-Sector Debt
Mr Oppong Nkrumah warned that continuing the intervention without a sustainable financing mechanism could recreate the conditions that contributed to Ghana’s previous energy-sector debt challenges.
He said the central question was not whether consumers should be protected from international petroleum price shocks, but who ultimately pays for that protection.
He warned that every additional month of suspended margins could add another GH¢519.12 million to the financial burden.
For three months, he estimated the exposure from the suspended margins at GH¢1.56 billion, rising to GH¢2.05 billion when the implied UPPF support is included.
Mr Oppong Nkrumah therefore called on the government to restore the suspended statutory margins and finance consumer relief through petroleum revenues or the national budget.
He cautioned that reducing fuel prices at the pump without eliminating the underlying cost merely transferred the liability to downstream petroleum institutions and, potentially, ultimately to taxpayers.
