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Commodity analysts at Japanese bank Nomura have warned that oil prices could perhaps strike $220 a barrel if the crisis in the Middle East continues. The market gurus compared the current situation to the 1990-1991 Gulf War, saying if Algeria and Libya were to halt oil production, prices could peak at the $220 mark. Others have given a more modest prediction of $150 if the unrest spreads. The average barrel price has surged beyond $120 in the past fortnight.

People in rural areas are calling for a cut in fuel duty following soaring prices on the forecourt. A litre of unleaded petrol in the north west of Scotland currently costs 139.9p, and Paula Gordon, who runs the Sleepy Hollow Smokehouse in the area with her husband Alistair, is feeling the pinch from the fuel price pressures caused by the Middle East unrest. She said plans to raise fuel duty in the April budget would be “crippling” for firms in rural areas.

A new scheme designed to increase green capital investment means incentive payments will be available to households from October 2012. The tariffs, called the Renewable Heat Incentive (RHI), involve payments being paid for 20 years based on every kilowatt hour of renewable heat produced. The government wants to reduce dependency on gas to reduce energy imports as well as cutting carbon emissions.

Commodity markets this week have taken fright at the turmoil in Bahrain, which has caused another spike in oil prices. The market had temporarily recovered following the past month’s record-breaking levels per barrel due to the instability in the Middle East. With Libyan production already near zero, markets reacted badly to new demonstrations in Bahrain and the risk it may spread to neighbouring Saudi Arabia. Brent crude futures broke back above $113 a barrel.

The Spanish government is rushing to print new signs to alert its people of a reduction in the motorway speed limit as oil prices rise. This is just one method the administration is using to tackle rising prices due to unrest in Libya. The maximum speed limit on Spanish motorways will be lowered to 110kph (68mph). Around 13% of the oil Spain consumes comes from Libya.

Global markets were thrown into turmoil as a result of tensions in Middle East countries where vast stocks of oil are kept. The rising price of oil, which could fuel further rises in already high inflation rates and hit corporate profits, affected stock markets. At the beginning of the week US shares, Asian stocks and European shares all closed heavily down.

A price comparison website has warned consumers they will face a 20 per cent rise in fuel bills this winter. Cold weather and rising gas prices are expected to push the average quarterly fuel bill up to a record £658.

Wholesale gas prices have risen dramatically over the last year, and are up 35 per cent since March 2010. It was only a matter of time before this increase would be passed on to retail prices. It has come as no surprise that supplier E.ON has joined four other energy companies in putting up prices and heaping more winter misery on suffering consumers. All suppliers have cited wholesale costs as the reason behind the price hikes.

Ofgem is considering forcing electricity and gas suppliers to offer a basic tariff to protect customers against soaring bills. It is one of the options being considered as part of the regulator’s investigation of the energy market. It is understood that Ofgem has not yet approached companies about the measure.

Minister for energy Charles Hendry is urging the Office of Fair Trading to bring forward its review into the off-grid energy market. He said: “Underlying many of the complaints are concerns about the challenges of supplying oil and gas to rural communities and whether the current market structure provides the reassurance that consumers can get fuels for heating when needed at a price they can afford.” Many consumers during the winter complained of oil shortages.

A leading authority on public health says the system for calculating most domestic fuel bills in the UK is contributing to thousands of deaths each winter. The UK Public Health Association (UKPHA) says two-tier tariffs, where the first units cost more, hit the poorest hardest. UKPHA chairman Professor John Ashton says winter death rates are much higher in Britain than in Scandinavia.

Oil firms have shut down production due to the uprisings in Libya. The country usually produces 1.6 million barrels a day, making it Africa’s third largest producer after Nigeria and Angola. Most of this oil is being exported to Europe. Wintershall, the oil arm of German chemical group BASF, said it was cutting its 100,000 barrels a day output. It is the first time that a significant amount of production has been shut down since the tension started.