Ongoing hostilities between Israel-Iran are sending shockwaves through the six-month-old Mahama-led administration, as the escalation is sending global oil prices up and threatening to erode the gains the government claims to have made so far.
After making a mockery of the previous government’s claims that rising economic indices were attributable to the Ukrainian-Russian war, the Mahama administration is saddled with a tough job of insulating the Ghanaian consumer from the ripple effects of the rising oil prices on the back of geopolitical tensions.
The dramatic escalation in Middle East tensions comes at a time when the government is keen to consolidate the gains it claims to have made in stabilising the Ghanaian economy. However, the recent developments have raised concerns over potential external shocks that could reverse the progress achieved.
Concerned about the possible ripple effects on the Ghanaian economy, President Mahama has directed the Ministers of Finance and Energy to closely monitor the unfolding situation between Israel and Iran, and assess the likely impact on Ghana’s fuel pricing and overall economic stability.
Addressing a durbar of chiefs and residents during his thank-you tour of the Savannah Region on Saturday, June 14, President Mahama stressed the need for vigilance and proactive policy responses.
“Today, I wish to reaffirm that our commitment to the people of the Savannah Region will never shake. Despite the progress we’ve made in stabilising the economy, Ghana is not immune to the shocks of global events,” he stated.
He noted that the escalating missile exchanges between the two Middle Eastern nations have already begun to push global crude oil prices upwards, with direct implications for Ghana’s domestic fuel prices.
“I have instructed the Ministers of Finance and Energy to keep a close eye on the developments and model the possible impact on our petroleum prices. They must prepare appropriate measures to safeguard the gains we’ve made,” he added.
Meanwhile, the Ministry of Energy and Green Transition has explained that the proposed implementation of the Energy Sector Levies (Amendment) Act, 2025 (Act 1141),which would have introduced a GH₵1 increment on petrol and diesel prices and a 20-pesewa rise on Liquefied Petroleum Gas (LPG),was informed by the upward trend in international oil prices.
Mr Rockson,the Spokesperson and Head of Communication for the Ministry attributed the delay in implementation to the volatility of global oil markets and government’s desire to cushion consumers from additional burdens.
“In fact, the last three days, if you check crude oil prices on the international market, it moved from $60 to $74, and this is the highest we’ve seen in the past five months. This has also caused some disruptions in our pricing module,” he explained.
He confirmed that the Ghana Revenue Authority (GRA) had postponed the implementation of the amended levy.
“I can confirm that the government of Ghana, as issued by the GRA, has postponed the implementation of the Energy Sector Levies (Amendment) Act, 2025 (Act 1141). This levy is what has introduced GH₵1 on petrol, GH₵1 on diesel, and 20 pesewas on gas. So, yes, I can give you that confirmation,” he said.
Mr Rockson attributed the decision to both the recent surge in global oil prices and the government’s commitment to shielding consumers from sudden and sharp price hikes.
“From February till date, a windfall was experienced on the fuel market as a result of the prudent management of the exchange rates, which has brought fuel prices from an average of GH₵17 to an average of GH₵11 or GH₵12, depending on which Oil Marketing Company (OMC) you buy from,” he noted.
The global crude oil market in mid-2025 is contending with a complex mix of factors including supply-demand imbalances, persistent geopolitical tensions, and broader macroeconomic uncertainty.
On Wednesday, June 12, Israel launched a series of coordinated airstrikes on Iranian nuclear facilities,marking a significant escalation in their long-standing hostilities. The strikes sent shockwaves through global markets, pushing Brent crude prices up by more than 7 per cent, to levels not seen since 2022.
The heightened geopolitical risk has raised fears of potential disruptions in oil supply from the Persian Gulf, which accounts for nearly one-third of global oil production. Iran alone contributes around three per cent to global output and, in a retaliatory move, could target key maritime routes such as the Strait of Hormuz, through which approximately 20 per cent of the world’s seaborne crude oil is transported.
With global oil prices now firmly on an upward trajectory, the Mahama led administration faces a delicate balancing act, ensuring fiscal stability while protecting consumers from the full brunt of imported inflation.