A SHARP increase in British petrol prices of 4p a litre, announced in yesterday's budget, is expected to mean considerable rewards for petrol station owners south of the Border, white Northern retailers lose out.

The rise, combined with an increase in vehicle excise duty, was criticised by the AA yesterday for hitting rural motorists by up to an extra Pounds 120 a year.

The increase in duty, perceived as a green tax and immediately effective - means the British motorist will, on average, pay 63.72p sterling per litre for ordinary unleaded petrol, or just over Pounds 2.89 sterling per gallon, compared to the average Irish price of 60.37p per litre or Pounds 2.74 per gallon.

In addition, the stronger sterling is against the pound, the more attractive will be the option for Northern motorists to travel south.

Mr Conor Faughnan of the AA said prices in the Republic were broadly on a par with those in the North, allowing for currency differences, but the pattern in recent years is a reversal of the traditional situation.

"We had it the other way around for many years and the northern counties in particular were haemorrhaging off business to the Northern economy, Mr Faughnan said.

He added the AA was against petrol price increases, believing them to be an inflationary measure and said that describing them as a green tax was a form of words" to raise revenue from motorists.