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Spain brings in measures to reduce oil dependence

Reuters reports the Spanish government is reacting against rising oil prices - Spain brings in measures to lower oil costs.

Spain, aiming to reduce its dependence on oil as crude prices surge, will raise biofuel blending and lower both speed limits and rail fares, Deputy Prime Minister Alfredo Perez Rubalcaba said on Friday.

The minimum proportion of biofuels to be mixed with mineral fuels, known as minimum blend, is to be raised to 7.0 percent from 5.8 percent, he said.

The news sent shares in biofuel maker Abengoa up nearly 5 percent.

The fuel-saving measures, which include cutting the speed limit on motorways to 110 kilometres per hour from 120 Km/h and lowering short and medium distance rail fares by up to 5 percent, will come into effect on March 7.

"A 10 euros increase in oil prices as has been seen in recent days increases our countrys energy costs by 6 billion euros per year, or 500 million per month," Rubalcaba said at a weekly news conference after a cabinet meeting.

Spain has little or no oil reserves, making it heavily dependent on imported oil.