ACEP Urges End to Premix Fuel Subsidy, Highlighting Abuse and Inefficiency

The Africa Centre for Energy Policy (ACEP) has called on the government to reassess its approach to the premix fuel subsidy, citing widespread abuse and inefficiency in the system. The organization is urging the government to focus on addressing the growing debt within the energy sector, particularly in relation to the premix fuel subsidy, which was originally intended to support the livelihoods of fishermen and other vulnerable communities.

According to ACEP’s Policy Lead, Mr. Kodzo Yaotse, the premix fuel subsidy is not reaching the intended beneficiaries, and instead, the fuel is being diverted for other purposes. The subsidy was meant to make fuel more affordable for fishermen, who rely on it for their work, but in practice, it is often being sold at higher prices to unintended recipients. This situation is not only financially burdensome for the fishermen but also undermines the core purpose of the subsidy.

Recent data highlights a troubling trend in the northern regions, where premix fuel consumption has reportedly increased by 300%, despite these areas lacking the necessary infrastructure, such as landing beaches, that would typically require large quantities of premix fuel. This suggests that the fuel is being diverted and sold to motorbikes, vehicles, and other non-fishing sectors, benefiting a small group of individuals who are exploiting the subsidy at the expense of the government and the intended beneficiaries.

ACEP has emphasized that the current subsidy system is failing to fulfill its purpose and is instead contributing to inefficiency and abuse within the energy sector. The diversion of fuel not only harms the legitimate users but also deepens the financial strain on the government’s subsidy program. The organization believes that the system is unsustainable and that it is essential for the government to consider alternative ways of supporting vulnerable communities without perpetuating the current inefficiencies.

The call for an end to the premix fuel subsidy is based on ACEP’s belief that the program cannot be effectively reformed under the current framework. Instead, the organization advocates for greater transparency, accountability, and better management of resources within the energy sector. ACEP also suggests that the government should prioritize tackling the growing debt in the sector, which has been exacerbated by the misallocation of funds through ineffective subsidy schemes.

Rather than continuing to fund a program that is being misused, ACEP recommends that the government explore other methods of supporting vulnerable communities. These could include targeted financial assistance or investments in more sustainable energy infrastructure that would benefit both the environment and the economy in the long term.

ACEP’s call for the termination of the premix fuel subsidy reflects its concerns about the inefficiencies and abuses plaguing the system. The organization urges the government to prioritize reforms that focus on transparency, accountability, and the proper allocation of resources to ensure that energy policies are both effective and equitable. By doing so, the government can better support those who truly need it, while also promoting a more sustainable and efficient energy sector.