President John Dramani Mahama has directed a temporary reduction in the regulatory margin on diesel by GH¢2 per litre for one month, effective August 4, 2026.
The move is to cushion consumers against rising fuel costs.
The order is in line with a Cabinet decision and the success of a similar intervention implemented in April this year.
The Presidential Spokesperson, Felix Kwakye Ofosu, communicated the directive in Accra yesterday.
The temporary measure is intended to "cushion consumers, prevent transport fare hikes, contain inflationary pressures, and mitigate the pass-through effect of higher fuel prices on the cost of living," the statement said.
Diesel price to drop by 12%
In an interview with the Daily Graphic yesterday, the Executive Secretary of the Chamber of Petroleum Consumers (COPEC), Duncan Amoah, described the intervention as "significant" for diesel consumers.
He stated that by the intervention, pump prices would fall from GH¢19.26 to approximately GH¢17.26 per litre, a nearly 12 per cent reduction.
"For consumers of diesel, the government seems to have done something quite significant to ensure you don't pay in excess of GH¢19 for a litre of diesel," Mr Amoah said.
He added that the reduction could help stabilise transport fares for at least a week or two, giving room for engagement with transport unions such as the Ghana Private Road Transport Union (GPRTU), which had recently threatened upward adjustments.
However, he pointed out that petrol users had been left out of the intervention.
"For users of petrol, the government intervention was pretty silent. That means between GH¢14 and GH¢15 a litre will be a stable feature for the next two-week period," he stated.
Prices historically high
Despite the relief, Mr Amoah stressed that current fuel prices remained elevated by historical standards.
He recalled that in January 2025, when the current administration took office, prices stood at around GH¢14.90 per litre. "So anything above GH¢15 is high," he said.
Mr Amoah also reminded the public that when fuel prices previously fell to around GH¢12, transport unions were urged to reduce fares, and a cross-section of them complied with a 15 per cent cut.
"Clearly, there has been a spike, and that ultimately could have led to some transport fare adjustment. But the transport operators have been magnanimous, and I think that has been good," he remarked.
Cost-benefit analysis
Mr Amoah estimated that the one-month intervention would cost the government between GH¢200 million and GH¢225 million in forgone revenue.
Yet, he argued, that was a worthwhile trade-off, as the broader economic impact of unchecked price rises, through increased transport and goods costs, could be double or triple that amount.
“I think it is a good bargain or a good trade-off for the likely economic impact we would have had if the government had not taken this intervention decision," he said.
He noted that by not collecting those revenues and instead letting the money remain in the market, the state effectively provided fiscal stimulus and kept the cost of living in check.
Sustainable strategic reserve
While welcoming the temporary measure, Mr Amoah cautioned against viewing such ad hoc subsidies as a sustainable policy.
"These interventions should not be viewed as something the government can consistently avail itself of," he warned.
"If prices increase further, what else is the government going to throw in?
That seems a very unsustainable thing to do," he stated.
He urged the government to instead prioritise a long-term strategic reserve programme, pointing out that BOST Energies currently held no strategic petroleum stocks.
"That has got to end soon," he said.
Mr Amoah proposed that the government should introduce a strategic reserve margin within existing taxes to purchase products when global prices are low and release them during price spikes.
"If you study the trends, you will know in which seasons prices are likely to go down and which months prices are likely to go up.
If you observe that curve, anytime prices go down, the government buys some to store, so that when prices are going up, the government can use what it bought and stored to cushion the market," he explained.
He added that such a programme would provide a more predictable and stable solution, reducing the need for repeated, costly fiscal interventions that strain public finances.
Meanwhile, the government has pledged to continue monitoring the situation and take additional measures where necessary to protect Ghanaians and sustain the country's economic recovery.
