Coalition rejects higher energy subsidy

The governing coalition does not support a proposal to increase the energy subsidy and is advising the Faroese parliament not to pass it, Kringvarp Føroya reports.

The proposal was submitted by Tjóðveldi and Sjálvstýrið. Coalition members on the parliament’s welfare committee say the current system of annual support packages, including oil, assistance and energy subsidies, is not the right solution.

They argue that the payments are based on income and assets rather than need. The coalition points to other forms of support, including a higher student grant and a rent subsidy that takes effect tomorrow.

Work is also under way to increase the income threshold for pensioners before benefits are reduced. The child tax deduction will rise gradually over the coming years.

If oil prices rise again, the government will decide this autumn whether people under financial strain should receive assistance, coalition members on the welfare committee said.

The energy subsidy was introduced in 2024 as a temporary measure lasting three years. It expires this year. The application deadline was June 30.