Petrol prices could hit £2 a litre if Libya turmoil escalates, warns Government minister

Petrol prices could soar to £2 a litre if the instability in Libya and neighbouring countries escalates, a Government minister has warned.

Alan Duncan, a former oil trader, suggested the price of crude could top 200 dollars a barrel - significantly above the current record of 147 dollars a barrel from July 2008.

In a worst-case scenario where terrorists exploit the turmoil in the Gulf to bomb tankers and reserves, the price could even nudge 250 dollars, which would leave UK motorists paying some £2.03 at the pumps.

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