Libyan president Muammar Qaddafi, once termed a “mad dog” by former U.S. President Ronald Reagan, is threatening to blow up oil facilities, a source told TIME magazine journalist Robert Baer.

However, the same source two weeks ago told Baer, a former Middle East CIA officer, that the Middle East revolutionary movement would never spread to Libya, where Qaddafi is hanging on to power and ordering massacres of protesters while being condemned by the United Nations.

Qaddafi’s reported plan to sabotage oil facilities in the oil-producing country “is meant to serve as a message to Libya's rebellious tribes: It's either me or chaos,” Baer wrote.

His source told him that Qaddafi’s main support is from a small but elite part of his 45,000-man army. "I have the money and arms to fight for a long time," Qaddafi reportedly said.

Oil prices have skyrocketed this week, passing the $95 per barrel mark on world markets. Financial analysts are predicting prices of $140-$200 a barrel if world events do not stabilize. Soaring oil prices could be a knockout punch to the struggling economic recovery in the United States and elsewhere and could spawn a new recession.

The monthly adjustment in the price of fuel next Tuesday will cost drivers at least five cents (17 agorot) a liter, and possibly more if the price of oil continues to rise. The expected increase more than cancels out the recent cut in the price of gasoline in Israel after public protests forced the government to cancel a hike in excise taxes.

One offsetting factor to the hike in world oil prices is the apparent readiness of Saudi Arabia to increase production to make up for reduced oil supplies in Libya, Africa’s largest oil producer, with a daily production of 1.6 barrels.