The Canary Islands Government has approved an extension of its temporary zero-percent IGIC on fuel until 30th September, as part of a package of measures aimed at cushioning the impact of continued global energy price volatility.

The regional government has also extended the 99% tax rebate on professional fuel for farmers, livestock producers, fishermen and transport operators.

The measures, approved by the Government Council, were originally introduced in April following rising energy costs linked to instability in the Middle East, and will come into force the day after publication in the Official Gazette of the Canary Islands (BOC).

Tax relief linked to fuel prices

The extension is not guaranteed for the full period and will depend on how fuel prices evolve over the coming months.

Under the new decree-law, both the zero-rate IGIC on fuel and the professional fuel tax rebate will be reviewed against changes in the Consumer Price Index (CPI) for petrol and diesel in the Canary Islands.

If the annual increase in fuel prices falls below 15% compared with the same month the previous year, the tax relief will begin to be phased out.

Specifically:

• If June's annual fuel inflation does not exceed 15%, according to figures published by the National Statistics Institute (INE) in July, the zero-rate IGIC on fuel will end in August.
• If July's annual increase also remains below 15%, based on INE data released in August, the measure will cease entirely from September.

Professional fuel rebates also adjusted

The tax refund for professional petrol and diesel users will follow the same timetable.

Current rebate rates will remain in place until 31st July, after which reduced rebate levels will apply during August if the price threshold is not met.

Should fuel inflation remain below the 15% trigger for a second consecutive month, the rebates will be reduced again in September before the temporary scheme comes to an end.

Supporting households and businesses

The Canary Islands Government says the measures have helped limit the impact of rising fuel costs on families while easing pressure on key sectors such as agriculture, fishing and transport.

Officials argue that, despite some recent easing in energy markets, international uncertainty continues to affect fuel prices and transport costs, making continued tax support necessary while conditions remain volatile.