More than half the filling stations in Northern Ireland are selling illicit fuel, according to a report released yesterday.
The situation - resulting from large-scale smuggling of fuel from the Republic - was denounced as a "scandal" by the House of Commons Public Accounts Committee, which accused paramilitary organisations of involvement.
It forms part of fuel duty fraud which costs the UK almost £1 billion in lost tax receipts each year, the backbench MPs' committee said.
Much of the rest of the missing duty is due to "red diesel" - which attracts substantial rebates because it is used in farm vehicles working off-road - being illicitly used in ordinary vehicles.
Mr Edward Leigh, chairman, said the system for deterring vehicle fuel fraud was "inadequate" and called for tax-dodgers' vehicles to be confiscated.
Duty totalling £380 million a year is lost in Northern Ireland because of petrol and diesel being brought from the Republic, where diesel prices are about 29p a litre lower.