BC Ferries will be hiking fares 3.5 per cent on most routes later this month in order to cover the rising cost of diesel fuel, the ferry company announced on Thursday morning.

The fuel surcharge will apply to all routes with the exception of the Port Hardy - Prince Rupert and Prince Rupert – Haida Gwaii routes.

CEO Mike Corrigan says every one cent increase in the price of a litre of fuel translates into a $1.2 million increase in company expenses. In November 2013, monthly fuel prices reached a new high for this year of $1.09 per litre.

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“Market pricing indicates that the price differential will continue throughout the year,” said Corrigan.

Corrigan says while the company has reduced its fuel consumption by 5.8 million litres since 2004, the cost of fuel in 2013 was $121 million, up from $50 million in 2004.  

"We have waited as long as we can to implement a surcharge, however we must act now as it is clear that fuel prices are unlikely to decline in the foreseeable future.

“We are well aware that implementing a fuel surcharge is unpopular with our customers, and we are doing everything we can to keep our fuel costs as low as possible, including building new ships with LNG capability."

All pricing on BC Ferries is regulated by the independent B.C. Ferries Commission.

The previous fuel surcharge was removed from all BC Ferries route in November 2012.