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Buying fuel in Republic costs UK Government £200m

By Sean O'Driscoll

Motorists in Northern Ireland who cross the border for cheaper fuel are costing the UK Government £200.6m a year, a study commissioned by the Republic's revenue commissioners has found.

It said that filling stations just south of the border are booming - with pumps selling more than 50% more diesel than in filling stations of the same size in other parts of the Republic.

It states this was because large numbers of Northern Ireland motorists are driving south to avail of cheaper fuel costs, especially for diesel cars.

That's good news for the southern exchequer - northern motorists contribute 7% of all tax receipts from motor fuel consumption in the Republic.

In all, motorists from Northern Ireland are contributing about £176m in excise duty, carbon tax and VAT on sales of diesel and a further £24.4m from petrol sales, according to the report.

The economic loss to the UK does not include lost income tax revenue and jobs in Northern Ireland filling stations.

The joint study by the Economic and Social Research Institute, Revenue and Trinity College Dublin said that the greater levels of southern diesel may partly be attributable to heavy goods vehicles and vans that buy cheaper fuel in the south before making long distance journeys to Britain and mainland Europe.

The research estimated that stations close to the border sold 54.4% more diesel and 14.6% more petrol than an otherwise identical one in another part of Ireland.

The report said that cross-border demand for fuel represented an important source of tax revenue for the exchequer.

However, it found that such trade also contributed to the Republic's greenhouse gas emissions, even though most of the fuel was probably consumed outside the jurisdiction.

It estimated that cross-border traffic for the purpose of fuel tourism resulted in an additional 1.17m tonnes of CO2 emissions per annum - 2% of the Republic's total greenhouse gas emissions. Researchers examined retail sales at 543 petrol stations in border areas from April 2013 to March 2015.

They found that the excise rate in the Republic was 13% lower than in Northern Ireland for petrol and almost 30% lower for diesel.

Forecourt prices in the Republic for petrol averaged £1.13 per litre last year, 9.5p cheaper than in Northern Ireland, and diesel averaged 95p in the south, 27p lower.

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