The difference in petrol prices between the North and the Republic already costs the UK exchequer £150 million sterling (€222.5 million) a year in lost excise duty and this could now rise to £200 million, the Northern Ireland Petrol Retailers Association has warned. Following the further increase in petrol prices in the British budget - adding 3.8p to the cost of a litre of unleaded petrol, the association yesterday urged that a special case be made for Northern Ireland so that excise duties between the North and the Republic could be harmonised.

Mr Gregory Campbell, a DUP member of the Northern Assembly, agreed that special account should be taken of the North's Border with the Republic.

"There is now a very strong case for regions like Northern Ireland, in its unique position, to have some form of fuel subvention to sustain the economy in what will be extremely difficult circumstances," he said.

The Ulster Unionist MP, Mr William Ross was also concerned about the petrol price rises and the 17 1/2p in tax being added to the cost of a packet of 20 cigarettes. "The large increase in duty on cigarettes and pipe tobacco may lead to very large job losses in the province," he warned. Mr Ross however welcomed the income tax cuts and the increases in pensioners' incomes, particularly the rise in the winter allowance payment. Mr Tony Fleck of the NI Drinks Industry Group raised "one cheer" for Mr Brown's decision to freeze drinks prices. But he called for more support to reduce the wide differentials in drink prices with other European Union countries, excluding the Republic.

"These have resulted in a massive increase in bootlegging which last year cost the Exchequer over £220 million in lost revenue, a massive 22 per cent increase over the year before."

Elsewhere, Northern reaction to the budget was guardedly positive. Voluntary and community groups welcomed the social and economic announcements made by Mr Brown. "There was a positive reaction, rather than the usual general negative reaction, which makes this budget different," said Mr Seamus McAleavey, director of the Northern Ireland Council for Voluntary Action.