As Ghanaians and the business community await the Mid-Year Budget Review today, there has been an unusual call, a call for the imposition of taxes on marine gas oil (MGO).
Dr. Patrick Kwaku Ofori, the Chief Executive Officer of the Chamber of Bulk Oil Distributors (CBOD), is urging the government to impose taxes on MGOs to curb fuel diversion, protect car owners from engine damage, and boost national revenue.
Dr. Ofori justifies that, currently, petrol and diesel products carry numerous levies and taxes, but marine gas oil, which is typically meant for vessels and fishing operations, enjoys minimal taxation.
That difference, Dr. Ofori reveals, is being exploited by unscrupulous actors. These cartels, he explains, buy the untaxed MGO and divert it to land-based filling stations, where it is sold to unsuspecting motorists at higher profit margins.
For the CEO of CBOD, this isn’t just about revenue leakage; it’s also about the safety of consumers since the adulterated marine fuel finds its way into cars, and the damage engines of unsuspecting Ghanaians.
In an interview monitored by The High Street Journal, the industry player described the current tax gap as a “dangerous economic incentive” for illegal trade. He believes the best way to address this is to level the playing field for all fuel products.
“All the taxes and levies that are on the main products; petrol and diesel, we expect that the government move the same taxes on MGOs, marine gas oil so that people don’t adulterate or misdirect these fuel from the cell sites into our filling stations that you and I may end up buying and it may have a ripple effects on our car engines,” he indicated.
He continued that, “Basically, because when you check the gap between the taxes on these products, there is that economic incentive for anybody who wants to be involved in any form of illicit activity.”
Beyond the consumer risks, the CBOD CEO also sees the imposition of tax on MGO as an opportunity for development. He said taxing MGO could unlock new revenue streams that government can channel into targeted coastal development initiatives, especially for fishing communities.
“We’re hoping that would this measure coming in, the government will rake in more revenues and that will even help with special initiatives for our brothers in the coastal areas for the fishing communities as a way of reverse community investment that will benefit everybody and not a situation whereby the few cartels that run the premix business are the ones who hold on and it doesn’t even get to the fishermen,” Dr. Patrick Ofori indicated.
Ghana has long grappled with the challenge of subsidized or unregulated fuels being diverted for commercial gain. Previous efforts to reform the premix fuel system have seen mixed results, often thwarted by politically connected interests.
Dr. Ofori’s proposal, however, represents a fresh policy lever that could combine financial discipline with social equity.
He also called on ordinary Ghanaians to demand transparency in fuel pricing and support efforts to reduce illicit fuel practices, reminding them that every litre of diverted MGO not only cheats the tax system but also ends up in your car, potentially causing damage that costs you more in the long run.
Former Minister for Power, Dr. Kwabena Donkor has earlier made a similar call in the past. Dr. Donkor has been advocating that the government scrap the subsidies, justifying it with similar reasons.
With the 2025 Mid-Year Budget Review slated for today, many are watching to see if the government will heed this call.
