Parliament has passed a new law aimed at stopping fuel tax evasion and smuggling that has reportedly cost Ghana about $25 million in just six months.
The Energy Sector Levies (Amendment) Bill, 2026, was passed on Friday, July 31, 2026, to close a loophole that some businesses have allegedly used to avoid paying the correct fuel taxes.
What the New Law Does
The law amends the Energy Sector Levies Act, 2025.
It increases the Energy Sector Shortfall and Debt Repayment Levy (ESSDRL) and the Road Fund Levy on fuel oil.
According to Finance Minister Dr Cassiel Ato Forson, the amendment is not a new tax on ordinary Ghanaians and will not increase fuel prices at the pump.
The law is expected to improve revenue collection in the downstream petroleum sector and reduce abuse of fuel subsidy programmes meant for industries.
It also aims to narrow the tax difference between fuel oil and diesel, which authorities say has encouraged tax evasion.
Government Uncovers Tax Evasion Scheme
Presenting the bill in Parliament, Dr Forson said the government had uncovered a tax evasion scheme involving the misclassification of diesel as fuel oil.
He said Ghana lost an estimated $25 million in revenue between January and June 2026 because of the practice.
According to him, diesel attracts taxes of GH¢3.35 per litre, while fuel oil is taxed at only GH¢0.25 per litre.
He explained that fuel oil sales had increased far beyond normal levels.
Using data from the past five years, Dr Forson said Ghana typically records fuel oil sales of about five million litres each month.
However, between January and June this year, monthly sales exceeded 20 million litres.
“In fact, this represents a 493 per cent increase over the last year,” he said.
Smuggling Driven by Tax Differences
Dr Forson said some individuals had taken advantage of the tax gap by buying diesel, disguising it as fuel oil and paying lower taxes.
He explained that industries will continue to receive tax relief on fuel oil, but the system will change.
Instead of receiving the tax exemption before purchasing fuel, companies will now pay the full amount first and later claim a refund.
“Mr Speaker, ex-ante simply put is you get a tax exemption ahead but now you get a tax exemption ex-post. You have to pay for it as industry and claim the refund.
“Mr Speaker, this will not amount to a tax increase,” he said.
No Increase in Fuel Prices
The Finance Minister stressed that the amendment will not increase fuel prices because fuel oil is mainly used by industries and not by motorists.
He also recalled that a similar tax adjustment on marine gas oil had successfully reduced smuggling in the past.
According to him, the latest amendment is intended to stop the same practice from shifting to fuel oil.
The government also plans to amend the Revenue Administration Act to reduce the fuel tax refund period for industries from 90 days to 14 days.
“So what we are saying is that we are equally going to amend the Revenue Administration Act to make the tax refund system relating to industries buying fuel oil moving from 90 days to 14 days.
“Mr Speaker, in the meantime, the GRA Commissioner General will issue a practice note so that using that practice note that tax exemption will be given to them in 14 clear days,” he said.
Dr Forson warned that if the loophole is not closed, Ghana could lose more than GH¢1 billion every year through fuel smuggling.
