Every time a Ghanaian motorist fills a tank, part of the money goes to rescuing the energy sector. Since mid-2025, that share has more than doubled. Yet the sector’s financing hole is getting deeper, not shallower, and the 2027 Budget will have to decide who covers the gap.

The levy at the centre of the problem is the Energy Sector Shortfall and Debt Repayment Levy, popularly called the One-Cedi Fuel Levy. In April 2025, Parliament consolidated several existing levies, including the Energy Debt Recovery Levy and the Price Stabilisationand Recovery Levy, into this single charge. Two months later, government raised it from 95 pesewas to GH¢1.95 per litre.

At the time, Finance Minister Dr Cassiel Ato Forson put the case bluntly. He told Parliament that total energy sector debt stood at US$3.1 billion at the end of March 2025, and that the sector posed the greatest economic and fiscal threat to the country.

The levy has not closed the gap. According to the Finance Ministry’s 2025 Annual Report on the Management of the Energy Sector Support Account, the levy generated GH¢8.81 billion in 2025, while spending on energy sector shortfalls and legacy debts reached GH¢22.67 billion. In other words, the money collected at the pump covered less than 40 per cent of the bill.

The Treasury paid the rest. Government transferred an additional GH¢12.85 billion from the Treasury Main Account: GH¢5.16 billion for shortfall payments and GH¢7.69 billion for legacy debt repayments. By the end of the year, the support account held a closing balance of just GH¢252.23 million.

The scale of that spending is striking when set against the government’s wider ambitions. At the current exchange rate, the GH¢22.67 billion spent on the energy sector in 2025 is roughly equal to a full year of the US$2 billion annual investment President John Dramani Mahama has promised under his New Economy Programme.

The pressure is building, not easing. The 2026 Budget projects energy sector shortfall financing needs of GH¢15.2 billion, up from about GH¢12 billion in 2025

Much of the money does not buy new power. A large share goes to clearing old obligations to independent power producers, state-owned enterprises and fuel suppliers built up over years. The rest covers the gap between what it costs to produce and deliver electricity and what the sector collects from customers.

Global oil prices are adding to the strain. Thermal power plants burn fuel, and in 2025 the Finance Minister estimated the country needed US$1.2 billion just to buy fuel for thermal generation. Brent crude averaged US$102.1 a barrel in September 2026, up 15.9 per cent in a single month, according to the Bank of Ghana. Every rise in crude raises the cost of keeping the lights on.

Motorists are feeling it twice. The levy is already built into pump prices, and diesel prices are now rising again: the Chamber of Petroleum Consumers projected a 4.07 per cent increase in diesel prices from November 1. Diesel moves goods across the country, so higher costs feed through to food and transport prices.

Electricity customers are paying too. The Bank of Ghana says the recent rise in inflation was driven mainly by non-food items, reflecting utility tariff adjustments and higher crude oil prices.

The sector’s state-owned companies carry their own burdens. The Tema Oil Refinery inherited a debt burden of about US$517 million, including roughly US$120 million owed to the government. Its management has said the Finance Ministry plans to write off about US$120 million of that debt.

None of this means the levy has failed entirely. Without it, the Treasury’s bill would have been far larger, and supporters argued at the time that the levy was meant as a transition tool while the country shifts towards cheaper, gas-based power. There are signs of progress on supply too: upstream partners have committed US$3.5 billion to raise oil and gas output, with Jubilee field production rising from 60,000 to 85,000 barrels a day.

But the numbers make one thing clear: the levy alone cannot fix the sector. As long as legacy debts, expensive thermal fuel and revenue losses in the distribution chain remain, the gap will keep returning to the Treasury.

This puts the 2027 Budget at a crossroads. Finance Minister Dr AtoForson presents it to Parliament on November 12, alongside a promised US$10 billion New Economy plan for jobs and growth. He faces three broad choices for the energy hole: raise the levy again and squeeze motorists further, raise electricity tariffs and burden households and businesses, or keep drawing on the Treasury and leave less money for roads, schools and the jobs programme.

Each option has a cost, and so does doing nothing. The deeper fix lies in cutting the cost of power at its source, through cheaper domestic gas, stronger revenue collection and clearing the legacy debts that keep the sector in a cycle of borrowing.

Until that happens, the pattern is likely to continue. Drivers pay, the Treasury tops up, and the energy hole grows.