The Canary Islands’ Ministry of Finance, in an agreement with the European Union has announced the expansion of its fuel price subsidy scheme to cover all non-capital islands from 1st February, to include Lanzarote and Fuerteventura.
Previously, this measure was only available for La Palma, El Hierro, and La Gomera.
The initiative has been incorporated into the 2025 General Budget Law of the Canary Islands, with the objective of alleviating the financial burden on residents of smaller islands, where fuel prices tend to be higher compared to the capital islands of Gran Canaria and Tenerife.
Under the new scheme, an extraordinary subsidy will be applied per litre of fuel supplied, varying depending on the island. The rates for February and March are set at:
To ensure that the measure reflects actual costs, the subsidy will not be fixed but will instead be adjusted quarterly. The calculation will be based on price comparisons between each non-capital island and the average fuel prices in Gran Canaria and Tenerife during the same period.
The determination of eligibility for the subsidy in each period will be based on whether the average price of petrol and diesel in a non-capital island exceeds that of the capital islands. This means the subsidy may fluctuate or, in some cases, be set to zero if there is no significant price disparity.
More Precise Price Adjustments
The Canary Islands' Minister of Finance, Matilde Asián, emphasised that the reform represents a major step forward by ensuring that fuel prices align more accurately with the economic reality of each island.
“This initiative aims to mitigate the real additional costs faced by residents of the non-capital islands,” she stated, which are generated by extra distribution costs and the smaller quantities purchased to service drivers on these islands.
According to the newly established criteria, the subsidy will be applied when the average price of petrol (G95) and diesel (GOA) on a non-capital island is at least five cents higher per litre than the equivalent average in Gran Canaria and Tenerife.
The subsidy rates are determined as follows:
If the price difference falls below five cents per litre, no subsidy will be granted.
This initiative aims to create a fairer system, ensuring that residents of the smaller islands do not face disproportionately high fuel prices compared to those living in Gran Canaria and Tenerife.
