NUNAVUT - The Government of Nunavut has announced a substantial increase to the cost of fuel.

Effective July 1, consumers will pay 22 cents more per litre for gasoline, home heating, diesel, P-50 Aviation, Avgas and Naptha.

Tudja Pishuktie, left, and Leanna Qupee take a break from working the cash at Baffin Gas Bar in Iqaluit. - NNSL file photo

In Iglulik for instance, the price of heating fuel will jump from what was approximately $1 per litre to $1.24 per litre.

The price of Jet A-1 fuel will be raised 30 cents per litre, from approximately $1.43 to 1.75.

The hike is due to escalating world oil prices, and prices will remain subject to further change, according to a release late Friday afternoon.

Qulliq Energy Corporation (WEC), which purchases its fuel from the territorial government, simultaneously announced it will apply for an increase to its fuel stabilization rider (FDR).

If approved by Minister of Energy Ed Picco, all communities in Nunavut will be subject to an FDR increase from 6.4 cents per kilowatt hour to 12.52 cents per kilowatt hour.

This rate, which is applied to all hydro bills, is put into a contingency fund which helps offset the changing fuel prices.

The FDR had been reduced slightly in 2007 because there had been little change in fuel prices between 2006 and 2007, according to spokesperson Meghan McRae.

The government announced a previous increase in fuel costs effective Nov. 1.

Then, the retail price of gasoline jumped 10 cents per litre, while aviation fuel was increased by 20 cents a litre.

At that time, the cost of diesel fuels, which are used mainly for heating, remained the same.

In 2007, the government spent $138 million on fuel purchases. According to Friday's release, it will require an additional $80 million for 2008.

It expects to purchase 187 million litres of fuel this year, 17 million more than last.