B.C. biodiesel users will have to absorb a hefty price increase starting in the new year. (www.reoc.info)

Some B.C. gas stations have stopped selling biodiesel because the cost of the fuel could go up by as much as 22 cents per litre in the new year when the provincial government ends a tax exemption.

That means that biodiesel – a blend made from renewable resources such as vegetable oil – could become more expensive than regular gasoline.

'It certainly makes it a disincentive'—United Petroleum's Duane Searle

The cost of a litre of biodiesel has fluctuated between 80 and 90 cents, a few cents less than regular diesel. Without the tax exemption, the biodiesel pump price could rise to more than $1.10.

Gasoline was selling for about $1.05 per litre in Vancouver on Thursday.

United Petroleum Products Inc. has sold about 250,000 litres of biodiesel in the Lower Mainland each month, but is considering pulling the alternative fuel from its pumps.

"It certainly makes it a disincentive for people to buy the higher blends of biodiesel," United Petroleum sales manager Duane Searle said of the price increase.

In addition to its own retail and commercial fuelling stations, the company supplies biodiesel to other gas stations, including Autogas Propane Ltd., which has already decided to stop selling it.

The provincial government said it's pulling the tax exemption because regular diesel must now contain at least three per cent biodiesel, which means more biodiesel will actually be sold.

The B.C. Sustainable Energy Association supports the move.

"This is exactly the kind of policy you need," said association president Guy Dauncey, "assuming that the biodiesel being sold has a strong net carbon reduction benefit."

Dauncey said the B.C. government should adopt another change which would help ease the impact of the price increase — make biofuels exempt from the 4.14-cent-per-litre provincial carbon tax.