Consumers of petroleum products in the country will in the coming days pay more at the pumps as government announces increment in the energy sector levy to raise more revenue to pay off Ghana’s legacy debt.
Finance Minister Ken Ofori-Atta who made the announcement Monday while presenting the 2019 mid-year budget review to parliament indicated the increment formed part of measures being put in place by government to solve the country’s energy challenges.
“Government proposes to increase the Energy Sector Levies by 20 pesewas per litre for petrol and diesel and 8 pesewas per kg of LPG, so as to increase the inflows to enable government issue additional bonds to pay down our energy sector debt obligations,” he announced.
“Based on current indicative prices for petrol and diesel this translates to 90 pesewas per gallon,” Mr. Ofori-Atta explained
The Minister said the energy sector is faced with serious challenges that are threatening to have a crippling effect on the entire economy if not handled properly.
Government, he said, has paid 60 per cent of the legacy debt.
“Government in 2017 issued the Energy Sector Levy Act (ESLA) bonds which has, to date, raised almost 6 billion cedis on the back of the ESLA levies to pay for the legacy debts from the NDC’s ‘dumsor days.
“The bond proceeds were used to liquidate approximately 60% of the energy sector legacy debts,” Mr Ofori-Atta said.
To prevent debt recurrence, the minister proposed that it was converting all the ‘take-or-pay’ energy contracts to ‘take-and-pay’ contracts. This means government will pay for only power drawn from the power producers.
Mr Ofori-Atta said the country’s energy capacity was far more than required, something he said had become a financial burden on the country, because it has to an excess of 2 billion cedis for energy production that was not in use due to the excess of installed capacity.
By Paul Selorm Agbo| 3news.com| Ghana