The Food and Beverage Association of Ghana (FABAG) has raised concerns over the GH¢1 fuel tax expected to rollout of July 16, 2025, warning that it could derail efforts to reduce the cost of goods and services.

According to the Association’s Executive Secretary, Sam Aggrey, the decision to raise the fuel tax to GH¢1 is ill-timed and unnecessary.

He explained that the government introduced the tax to help offset rising electricity costs, but questioned the logic behind it, noting that the recent strengthening of the cedi has already created a financial advantage for the government.

"Recently they are introducing the petroleum tax which has been raised to GH¢1. It's not necessary, because we need to look at the cost. The reason why they are imposing that is to raise money to fill that gap of electricity cost that is going up. We need to consider the overall cost impact. This tax isn’t needed right now," he said.

He argued that the fuel tax hike would lead to increased transport costs, which would eventually be reflected in higher prices of goods on the market.

“Raising fuel prices means it costs more to move products from place to place, which directly affects final prices. That completely undermines our efforts to bring prices down,” he stated.

He also stressed that in the absence of a price control regime, transportation costs play a major role in determining product prices across the country.

SP/EB

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