Police and customs officers have uncovered an illegal fuel laundering operation in Northern Ireland.

Officers said the plant at Carrickmore in County Tyrone had a capacity to launder 85,000 litres of fuel a month.

The laundering operation, which could have cost the taxpayer up to �500,000 a year, was discovered in a barn erected above several underground storage tanks.

The current price of fuel in the Republic of Ireland is lower than that in Northern Ireland - with excise duty on petrol 20p per litre cheaper on petrol and 25p per litre on diesel.

'Significant hit'

Large amounts of illegal fuel are smuggled across the border into Northern Ireland.

Paramilitaries are involved in many of the illegal laundering operations.

A customs spokesman said: "This was a highly sophisticated laundering operation.

"Its discovery is another significant hit on the illegal fuel trade and shows the benefit of close working with the Police Service of Northern Ireland.

"We have repeatedly warned motorists to think before buying cheap fuel. It puts honest filling stations out of business, robs the taxpayer of money for public services and puts the motorist's vehicle at risk of serious engine damage."

He said about 8,400 litres of illicit fuel was seized and two buses, two private vehicles and a coach were taken away.

A man and woman have been arrested in connection with the discovery.