'It's unfair to our beneficiaries because they're already dealing with inflation.'

Nunavut's sky-high cost of living will climb even higher after the government raised fuel prices late last month.

Skyrocketing world oil prices prompted the Government of Nunavut to raise fuel prices by 22 cents per litre and the price of jet fuel 30 cents per litre.

Eva Arreak, president of the Baffin Regional Chamber of Commerce, said businesses are going to have to pass on those increased costs to consumers.

"Once fuel prices goes up then everything is getting the ripple effect: food prices, electricity, all the things that we use," she said.

"The private businesses cannot control what is set by the government."

The first business to pass on the new energy costs to consumers was Qulliq Energy Corporation, which nearly doubled its fuel surcharge from 6.4 cents per kilowatt-hour to 12.52 cents on the same day the GN announced the new fuel prices.

Travelling around the Arctic by air is also going to get more expensive. On June 15, Nunavik's Air Inuit added a 5.5 percent fuel surcharge to each ticket, which works out to around $150 on a $2,000 fare.

The airline plans another increase of at least 3.5 per cent in September, and hasn't ruled out quarterly increases in the future.

Canadian North announced July 1 that they'll impose a fuel surcharge of $30 each way for most routes, and a surcharge of $20 on a few short routes.

They've also raised freight and charter rates, Canadian North spokesperson Kelly Kaylo said.

Representatives from First Air didn't respond to repeated requests for an interview.

In Nunavut, the cost of aviation fuel, sold at all airports except Cambridge Bay and Resolute Bay, rose 22 cents a litre. Jet fuel, sold at most Nunavut airports, rose more than 30 cents per litre.

Paul Kaludjak, president of Nunavut Tunngavik Inc. said the GN should have tried to cut operating costs so it could go without hiking fuel prices. The increases make it harder for beneficiaries to get by, he said.

"We maintain it's unfair to our beneficiaries because they're already dealing with inflation."

Instead, the GN "should be looking within itself to see if they can compensate for these increases in-house" by spending less importing workers from the south and buying the cheapest capital items available, Kaludjak said.

The new costs are also expected to hammer the bottom lines of municipal governments.

Municipal taxpayers in Iqaluit will feel the pinch twice, since the city will pass on the increased costs of fuel and electricity. That means homeowners will see their own utility bills, plus their tax bills, go up.

"We're getting a double whammy of overhead [cost] increases," said John Hussey, Iqaluit's senior administrative officer.

Hussey estimates the price hikes will cost the city at least tens of thousands of dollars more: $33,000 more for street lighting, $22,000 more for lighting water heating stations, and $80,000 more for fuelling the city's fleet of vehicles. And those are just the calculations he's done so far.

Hussey said the city budgeted for an energy price increase, but not one of this magnitude. He said it's hard to reduce fuel costs because so many of the city services-water, garbage collection, and road repair for example-are delivered with heavy trucks.

Paul Waye, Rankin Inlet's chief administrative officer, said the hamlet is trying to trim fuel costs by replacing big pickup trucks with smaller models and cutting the amount of time heavy equipment is left idling.

Rankin spends "hundreds of thousands" of dollars per year on gasoline and diesel, Waye said. In the past the GN has chipped in money to help offset the increase in fuel costs, but Waye said he hasn't heard if that will happen again.

"We just have to accept the reality and try to work with it and make economies to save fuel and electricity where we can," he said. "Hopefully we'll be the better for it."