"I come down here to fill the car once every 10 days. It costs ú36 sterling to fill it at home and ú26 punts here," said accountant, Mr Adrian Boylan from Warrenpoint, who drives a 1998-registered Mercedes car. He was one of many motorists who were yesterday prepared to queue for fuel at the Statoil service station on the Ballymascanlon Road between Dundalk and Newry - one of the first service stations south of the Border.

For many businesses this is a welcome turnaround. They all remember the time when prices were cheaper in the North and the business went the other way. For a while, the pound was even stronger than sterling.

"I would normally come with ú60 on me and would then go shopping," added Mr Boylan who appears typical of many people living just north of the Border.

The further increase in British prices in this week's budget is expected to increase the flow of business across the Border.

"It is really too early to quantify the effects of the British budget here but many retailers feel that motorists who travel to fill up with petrol will then go shopping here as well," said the chairman of Dundalk Chamber of Commerce's retail committee, Mr Owen Leavy.

"It is time something happened in our favour; it is the punts for sterling that makes the big difference. Overall, it has to be of benefit; it is a move in the right direction for retailers here," he added.

Yesterday a litre of unleaded petrol was 56.8 pence where Mr Boylan filled his car. At the BP service station a few hundred yards north of the Border at Carrickarnon, a litre of unleaded petrol was 64.9 pence sterling, which will increase as the budget changes feed through. At that garage, a sign on the counter said that the pound was worth 80p sterling. Mr Eugene Mannion is the manager of Murphy Bros, a service station at Carrickastricken, Forkhill, Co Armagh, which was once the largest petrol retail station in Ireland. "In the last four to five years, the British have consistently targeted the petrol price in the budget and trade in it is long since gone, especially since the exchange difference. It has been very bad for the last six months with the 20 per cent difference."

The effect of the buoyant sterling exchange rate is noticed by garage owner, Mr Brian McKevitt, who runs the Maxol station on the Newry road, Dundalk.

"There has been a significant uplift in Northern business and it has been ongoing this last year or so. It is the way the money is here and the cheaper fuel prices."