Gas prices in the Vancouver area are now at record highs and could rise even further, to $1.60 a litre by the end of the week. That’s not just going to affect drivers, critics say; it’s going to hurt the entire local economy.

The first of four annual increases to the province’s carbon tax kicked in on Sunday, adding 1.2 cents to the cost of a litre of gas. By Monday morning, prices had risen to $1.56 per litre -- more than a quarter higher than in Montreal and Toronto, where gas prices are hovering around $1.30. It’s also significantly higher than the $1.19 drivers are paying in Calgary.

And prices are expected to rise in B.C. even further.

GasBuddy.com analyst Dan McTeague notes that by the end of this week, refineries will transition from winter gasoline to a summer blend, which will add four more cents to the price of a litre.

According to McTeague, that will only exacerbate a “chronic shortage” in B.C.’s gas supply that is due to poor pipeline capacity and a refinery that has shut down for maintenance.

Asked about the soaring price of gas on Sunday, B.C. Premier John Horgan said he doesn’t believe drivers will “begrudge” the extra penny that the carbon tax added to the price of the litre.

He says the province is simply trying to comply with federal regulations imposed by the Trudeau government to price carbon at $50 per tonne by 2022, and he says the money has been earmarked to fund green initiatives.

“I don’t buy the argument some have put forward that carbon pricing is a drag for the economy,” Horgan told reporters on Sunday. “Quite the contrary; it’s led to innovation and new investments in clean technologies.”

But Mike Dunn, a manager at Vancouver’s Pizzeria Barberella, is worried that higher gas prices will eventually mean higher prices in the supplies that are trucked to his business every week.

“It confronts you with a choice of: do we go with a lower quality product so we can pass on savings to customers? Or do we stick with our high standards because we don’t want to compromise?” he told CTV Vancouver.

Kris Sims, the B.C. director of the Canadian Taxpayers Federation, said when filling up a typical Toyota Camry sedan, $5.99 will now go toward the carbon tax. More than $10 will go toward the tax to fill up a pickup truck, she added.

And when it comes to the larger tractor trailers that transport the food and supplies most of us rely on, more than $45 of the cost of a diesel fill-up will go toward the tax.

“So it’s just an astounding amount of money when you start to add this up,” she told CTV News Channel on Monday.

Sims said she supports initiatives to create cleaner air, but only if ordinary residents are not made to suffer.

“The idea of amping up the carbon tax to the point where it punishes people so much that they can’t run a business and they can’t drive around, we have to ask ourselves: what kind of an economy and society will that be?”