The Northern Ireland Office has turned down a recommendation from a powerful group of MPs to bring fuel duties more into line with those in the Republic.
The all-party Westminster Committee had made the suggestion in a report on organised crime submitted last summer. The MPs believe parity in North-South fuel duties would help stop fuel smuggling and laundering rackets. estimated to be worth £300 million (€447 million).
However, the plan was turned down by security minister Paul Goggins, who said the proposal ran contrary to UK policy on taxation and the environment. He also questioned if it would work.
Ray Holloway of the Petrol Retailers Association accused the NIO of turning a blind eye. He said the government was "putting off addressing a problem that they've not wanted to address for a very long time".
"They say if they made tax the same, it would move the problem across to Scotland. But it's easier to police a sea route than a land border of 315 miles."
Fuel-smuggling funds criminal organisations, he said, "and it has destroyed the fuel industry in a supply sense in Northern Ireland".