A Breakdown of Taxes, Levies and Margins Imposed on Ex-Pump Prices

Taxes are the main source of revenue for government. Proceeds from the tax collection are used to undertake government policies and to meet expenditure and other budgetary requirements.

Petroleum products are no exception from tax impositions as such various taxes, levies and margins are imposed on petroleum products before it is passed down to the consumer. Data shows that total taxes, levies and margins constitute 49%-51% of the ex-pump price.

The table below outlines the various taxes charged on petroleum products sold at the pumps.



To facilitate the debt recovery of the Tema Oil Refinery, downstream petroleum sector, foreign exchange under recoveries and power generation and infrastructure support


To support road maintenance


To support Energy Commission activities


To be used as buffer for under recoveries or subsidies or to stabilize petroleum prices for the consumer
UPPF To ensure parity in prices regardless of cost differential incurred due to location
MARKETERS MARGIN Represents the gross earnings due an OMC for every litre sold
FUEL MARKING MARGIN To pay for the marking of petroleum products to prevent tax revenue loss, smuggling, adulteration of petroleum products.
BOST MARGIN To be used to cover the maintenance and operating cost of petroleum product depots and to undertake expansion programs of the depot
DEALERS MARGIN The gross earnings due a Petroleum Retailer operating an OMC
PRIMARY DISTRIBUTION MARGIN To offset cost incurred in moving products from the coastal depots to in land depots
SPECIAL PETROLEUM TAX (15% of Ex-Depot price) As part of VAT reforms

Source: Energy Sector Levies Act 2015 and National Petroleum Authority Regulations, 2012. (L.I. 2186)


The Ex-pump price is calculated as follows:

Ex-ref price (based on import parity) = CIF + Other related charges

Ex-Depot price= Ex-ref price+ Levies/Taxes

Ex-pump price= Ex-Depot price+ Marketing margins

In a deregulated regime, the NPA can do little to manipulate prices, therefore the consumer is exposed to the full effects of the forces of demand and supply in the market. However the taxes, levies and margins may be reviewed to alleviate the burden on petroleum consumers.

By: Dennis Newton Dei-tutu
Research Analyst