I have been following commentaries on the rising fuel prices in Ghana; and the difficulty faced by NDC functionaries to explain them away. 

History shows that the fuel pump has a long memory. When the NPP was in government, rising domestic fuel prices were called “insensitive”. Today, the economics suddenly requires more explanation.

Ghanaians should remember the fuel-price debate of 2021.

With the NPP in government, the NDC repeatedly pointed to the price of fuel as evidence of economic mismanagement. In October 2021, the NDC described persistent fuel-price increases under the Akufo-Addo/Bawumia administration as the product of “insensitive and bad leadership.” It blamed taxes and cedi depreciation and demanded that government stabilise the currency through prudent economic management in order to stabilise fuel prices.

But there was an important part of the story that received considerably less political attention:

2021 was the middle of a major global energy shock.

As the world reopened after COVID-19, global petroleum demand recovered much faster than supply. OPEC+ maintained production restraints, investment in oil production had fallen and global petroleum inventories were being depleted.

The numbers are striking.

Brent crude started 2021 at about US$50 per barrel and reached US$86 by late October, an increase of more than 70 percent. The U.S. Energy Information Administration estimates that global petroleum inventories fell by 469 million barrels during 2021, probably the largest annual withdrawal since 2007. (source: U.S. Energy Information Administration)

The IMF was describing the same phenomenon in real time. By October 2021, it reported Brent above US$85—the highest in seven years—amid tight energy supplies and a global surge in energy prices. (source: IMF)

Ghana did not produce that shock.

Yet the political narrative at home was considerably simpler: fuel prices are rising; therefore the government is failing.

Today, the roles have reversed.

The NDC is in government. The NPP is in opposition. Fuel prices have risen sharply again—and suddenly the public discussion has rediscovered international petroleum prices, geopolitical shocks, exchange rates and the mechanics of pass-through to the pump.

Those explanations are economically valid.

But they were valid in 2021 too.

The economics has always been straightforward:

International product price × Exchange rate + Taxes/Levies + Margins = Domestic Pump Price

Ghana is essentially a price-taker in the international petroleum market. When international prices rise, the landed cost of fuel rises. When the cedi depreciates, the domestic cost rises further. When the cedi strengthens, it can cushion part of the external shock.

That transmission mechanism did not suddenly appear in January 2025.

It existed under Akufo-Addo and Bawumia. It exists under Mahama.

This is why the important comparison is not simply GH¢14 then versus GH¢19 now. Comparing nominal prices across different years, different units and completely different global conditions would itself be poor economics.

The real comparison is the standard applied then versus the standard being applied now.

If global oil prices and geopolitical shocks deserve consideration today, they deserved consideration in 2021.

If exchange-rate management was the responsibility of government then, it remains the responsibility of government today.

And if the pump price alone was enough to pronounce judgment on economic management then, consistency requires explaining why that same test should not apply now.

This is what happens when complex economic issues are reduced to convenient political slogans.

Eventually, you may have to govern under the same economic laws you once dismissed.

The fuel pump has not changed the economics.

It has simply changed who has to explain it.

The reality however is that the NPP has a better record of providing relief to Ghanaians when fuel prices are increasing. 

The NPP abolished the excise tax on fuel, reduced the special petroleum tax from 17.5% first to 15% and then later to 13%, converted the special petroleum tax from ad valerum to specific tax; and for a long time, zero-rated the petroleum stabilization and recovery levy. Gold for Oil was revolutionary as it brought down fuel prices from above GH¢20 to GH¢11.

Most of these interventions were permanent as they were backed by legislation; and the effect were absorbed by the budget.

The NDC’s current  GH¢2 relief on diesel is temporary and worse of all, it is quasi-fiscal as it only cut margins for BOST and UPPF weakening the petroleum sector resilience. 

Even with this temporary relief, half of the amount has already been neutralized by the GH¢1 per liter levy imposed by the government on fuel; and another part neutralized by the recent increases in levies on fuel oil which imposed additional cost on industries and power producers. 

Lest we forget, the depreciation of the cedi year-to-date by 12% has further reduced the effect of the relief. 

These are the reasons fuel prices are still very high in spite of the temporary relief. 

What we need now is a comprehensive intervention by the government. The temporary relief is not enough as diesel is currently being sold between GH¢17.55 and GH¢18.99. 

Government must consider reviewing down the taxes on fuel especially by suspending the recent fuel tax increases or abolishing them completely, the same way the NPP did to provide significant relief to Ghanaians.

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