Petrol Retailers Association chairman Thomas Palmer: The government must cut fuel excise duty

The government admitted on Monday that it had lost an estimated �100m in duty over the past year because of the difference in fuel prices on the two sides of the border.

Private motorists, road hauliers and taxi drivers based in Northern Ireland are crossing into the Republic to buy fuel legally, and there has also been a vast increase in smuggling.

Now the Petrol Retailers Association says more of its members will be forced to close over the next three months as a result of government inaction.

Earlier in the year the Northern Ireland Affairs Committee at Westminster published a report highlighting the problem.

But the government has now ruled out a proposed subsidy scheme for filling stations along the northern side of the border, because it could prove expensive and ineffective.

Thomas Palmer: Government decision a slap in the mouth

The government also highlighted the difficulties in combating smuggling but said the Customs and Excise was doing all it could to disrupt the illegal trade.

The response has been dismissed as "inept and inadequate" by the Petrol Retaliers Assocation.

Thomas Palmer, the association's Northern Ireland chairman said that over 50 petrol stations had closed already.

"We expect that with this latest slap in the mouth that many more sites will close in the next three months.

"People were hanging one desperately, hoping against hope that this select committee report would be met with a positive response by government. Instead it has been dealt a death blow," he said.