We analyze the perversion of the fuel pricing system in the Canary Islands in 2026. Despite a tax burden of 24 percent compared to 56 percent in Europe, the commercial margins and the base cost in the islands absorb the benefits of the Economic and Fiscal Regime (REF), increasing the product price before taxes. The architecture of the REF, designed to compensate for the outermost regions through minimal taxation, faces a structural distortion that prevents savings from reaching the final consumer. In the case of automotive diesel, the scenario is even more burdensome for the productive fabric of the islands. The Price Without Tax (PSI) in the Canary Islands was 94.9 euro cents in January 2025, representing an additional cost of 14.8 euro cents per liter compared to the Eurozone average.
According to the latest reports from the Directorate General of Energy of the Government of the Canary Islands for January 2025, while the tax burden on 95 gasoline in the Eurozone reaches 56.99 percent, in the archipelago, it remains at a reduced 24.03 percent. However, this competitive advantage fades in the supply chain, where the price without taxes in the islands systematically exceeds the European average, revealing a inefficiency that directly penalizes disposable income in the seven islands.
The evolution of the commercial margin in the archipelago reveals a trend of structural widening that disproves the theory that prices in the Canary Islands fluctuate in direct correlation with the international market. If we observe the historical series reflected in the data from January 2025, the Price Without Tax (PSI) of 95 gasoline in the islands has increased by 1.31 percent in the last month, while in the Eurozone that same component barely rose by 2.49 percent from a much lower base.
This disparity suggests that, in the face of any spike in crude oil prices, operators in the Canary Islands transfer the costs to the consumer more quickly and with higher margins than their continental counterparts, taking advantage of the lack of supply alternatives. When comparing annual behavior, the anomaly becomes more pronounced. While the Public Price (PVP) in the Canary Islands fell by 4 percent compared to the previous year, the PSI (the actual cost of the product plus the company’s profit) only decreased marginally in comparative terms with the fall in international fuel prices.
This indicates that oil companies have retained a substantial portion of the decrease in international costs to boost their internal commercial margins. In practice, this means that when oil prices drop in London or New York markets, the relief reaches the Canary pump in a muted manner, but when prices rise, the impact is immediate and total.
This gap has continued to grow over the last decade; while in 2012 the graphs of cost evolution between the Canary Islands and the Peninsula maintained a reasonable distance, in the last three years the PSI lines have crossed, leaving the Canary Islands with the highest base fuel cost in the entire geographical area. Inter-island logistics is used as a recurring argument, but data suggests that the business profit per liter sold in the islands is significantly higher than that of the mainland. The comparison with the European Union highlights that the Canary system suffers from ‘competitive insignificance.’ While in liberalized markets with high connectivity, the refining and distribution margins are adjusted by demand pressure, in the Canary Islands, the market concentration among few players allows for margin stability that the REF indirectly subsidizes.
