A major petrol retailer has denied that fuel smuggling is forcing it to pull out of the North.
An article in yesterday's Financial Times claimed that some fuel companies, notably British Petroleum, were being forced to disengage from the North as racketeers now controlled half the fuel market.
A spokeswoman for British Petroleum denied the company intended to pull out. She said it had reduced its sites from 98 to 51 in three years but said it had reduced the number of filling stations in other parts of the UK by about 20 per cent.
"The market in Northern Ireland is very competitive and this is not helped by fuel smuggling and the duty differential," she said, but added that the company felt fuel bought by Northern drivers filling their tanks legitimately in the Republic accounted for more lost trade than smuggled fuel.
According to the Financial Times, fuel imports to the North from the rest of the sterling area have dropped from 940,000 tonnes in 1994, when sterling was weaker than the pound, to 440,000 tonnes last year.
The Petrol Retailers' Association has estimated that hundreds of millions of pounds in revenue are being lost every year with almost 100 retailers going out of business in the past two years.
However, Mr Noel Smyth, head of the association in the North, said smuggling was only one effect caused by the differential between fuel North and South.
In the Republic, the duty on diesel was 19.6 pence per litre while "on our side of the invisible line" the figure was 45.82 pence per litre, he said.
In such circumstances, "if people can make money, that's what they'll do", he said. Smuggling would continue as long as the difference in prices remained so large.
Three years ago all petrol stations were linked to a major company, now 219 are independent, and take fuel from wholesalers.