Mr Benjamin Nsiah, Executive Director of the Centre for Environmental Management and Sustainable Energy (CEMSE), has called on the Government to adopt a flexible petroleum tax regime that automatically adjusts fuel-related taxes to cushion consumers and the economy against global crude oil price shocks.
He said such a framework would allow taxes within the petroleum price build-up to be adjusted in response to fluctuations in international crude oil prices, helping to stabilise pump prices while protecting government revenue.
Mr Nsiah made the proposal in an interview with the media in Accra amid growing concerns over the impact of rising global crude oil prices on Ghana’s economy and the cost of living.
According to projections by the Chamber of Oil Marketing Companies (COMAC), petrol prices were expected to increase by about 7.58 percent and diesel by 12.50 percent during the August 1 to 15, 2026 pricing window due to higher international crude oil prices and the depreciation of the cedi.
The National Petroleum Authority (NPA) also raised its benchmark price floors, increasing petrol from GH¢13.28 to GH¢14.53 per litre and diesel from GH¢14.35 to GH¢16.97 per litre.
Following the adjustments, several Oil Marketing Companies increased pump prices, with industry players warning that the hikes could trigger higher transport fares and increases in the prices of goods and services.
Mr Nsiah said Ghana’s downstream petroleum sector remained highly vulnerable to fluctuations in global crude oil prices, making it necessary to establish an automatic fiscal mechanism capable of responding to changing market conditions.
He proposed a pricing framework with clearly defined price ceilings and floors under which taxes would be reduced automatically whenever international crude oil prices exceeded a predetermined threshold.
“When prices exceed the ceiling, we automatically relax the taxes on the build-up so that prices reduce comparatively,” he said.
Mr Nsiah explained that when global oil prices fell below a specified level, the same mechanism could increase applicable taxes to enable the State to maximise revenue without imposing an excessive burden on consumers.
He said such an automated system would enhance price stability and reduce the need for frequent policy interventions during periods of volatility in international energy markets.
The CEMSE Executive Director also called for a review of some regulatory margins within the petroleum pricing structure, arguing that certain charges contributed significantly to high fuel prices.
He specifically recommended a reassessment of the Unified Petroleum Price Fund (UPPF), stating that the fund had consistently generated surplus revenue.
“The Unified Petroleum Price Fund must be critically looked at and then slashed because it has always been generating excess surplus,” he said.
Mr Nsiah said reducing some of the regulatory margins would provide immediate relief to consumers while helping to reduce Ghana’s exposure to external price shocks.
He further urged Ghana and other countries in the West African sub-region to develop regional petroleum pricing benchmarks instead of relying solely on international trading platforms.
According to him, petroleum prices in the region were largely influenced by external benchmarks, leaving countries vulnerable to price movements beyond their control.
Mr Nsiah also advocated the adoption of refinery-based pricing as Ghana expanded its domestic refining capacity.
He said increased investment in refinery infrastructure presented an opportunity for the country to determine petroleum prices based on local refining costs and mark-ups rather than depending entirely on imported pricing benchmarks.
Mr Nsiah said such reforms would strengthen Ghana’s resilience to global energy market volatility and improve the country’s long-term energy security.
