Energy Analyst and Executive Director of the Centre for Environmental Management and Sustainable Energy (CEMSE), Ben Nsiah, has welcomed President John Dramani Mahama's decision to reduce the regulatory margin on diesel by GH¢2.00 per litre, describing the intervention as timely. Even so, he believes Ghana needs a more durable solution to recurring fuel price shocks.
Speaking in an interview with Sweet FM Online, Mr Nsiah said the government's latest move would provide immediate relief to households and businesses struggling with rising fuel costs, but cautioned that repeated interventions could complicate the state's revenue mobilisation efforts.
"It is commendable that the government has intervened in the petroleum downstream by removing some regulatory margins to cushion petroleum users, especially households and firms, so as to maintain their income levels, or comparatively maintain their income levels for better operational activities." - Mr Nsiah
Call for a flexible pricing framework
While praising the temporary relief, Mr Nsiah argued that Ghana's petroleum pricing structure requires a broader review.
He warned that relying on periodic tax reductions whenever fuel prices rise may not be fiscally sustainable over the long term.
"However, I think that we need to critically relook at the pricing regime locally because consistent intervention is likely going to derail government efforts of realising its fiscal objective in terms of revenue mobilisation." - Mr Nsiah
The energy analyst proposed the introduction of a flexible fiscal and regulatory framework that sets upper and lower price limits for petroleum products.
Under such a system, taxes would automatically be adjusted whenever pump prices move beyond predetermined thresholds.
If prices exceed the upper limit, tax components would be reduced to cushion consumers. Conversely, when prices fall below the lower boundary, taxes could be increased to preserve government revenue without causing sharp price swings.
"I think this will help us stabilise macroeconomic indicators and show that prices are, most of the time, within planned levels," he said, adding that predictable fuel prices would enable households and businesses to plan their expenditure more effectively.
Mahama orders one-month diesel relief
Mr Nsiah's comments follow President Mahama's directive ordering a GH¢2.00 per litre reduction in the regulatory margin on diesel for one month.
The government said the measure, which takes effect from Tuesday, August 4, 2026, is intended to cushion consumers, prevent transport fare increases, contain inflationary pressures and limit the impact of higher fuel prices on the cost of living.
According to the directive, the intervention follows Cabinet's decision and builds on a similar policy introduced in April this year.
Government also indicated that it will continue monitoring developments in the international energy market and may introduce additional measures where necessary to protect consumers and support the country's economic recovery.
For Mr Nsiah, the immediate relief is welcome. The bigger challenge, he suggested, is designing a pricing regime that can absorb future shocks without requiring repeated emergency interventions.
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