Zimbabwe is spending US$15m (�8.7m) of its desperately scarce foreign currency reserves on fuel imported from Kuwait and South Africa, to alleviate a shortage which has almost brought the country to a standstill.

The move was announced in the government-controlled Herald newspaper by Energy and Power Development Minister Amos Midzi, who said the supplies would arrive "in the coming days".

For two weeks, a critical lack of fuel has taken public buses off the streets, dealing yet more damage to an economy already in crisis.

The embattled government of President Robert Mugabe threatened over the weekend to nationalise privately-held petrol stations owned by foreign oil giants such as BP, Mobil and Caltex.

The government has yet to make clear where the foreign currency is going to come from to pay Kuwait's IPG and South Africa's Engen Petroleum.

Evaporating exports

Zimbabwe has had problems obtaining sufficient fuel for several years, no least because it lacks the ability to pay for it.

Agriculture has been disrupted by the seizure of most commercial farms for redistribution to landless black farmers.

As a result, the export earnings from a country once seen as the breadbasket of Southern Africa have evaporated.

The mismatch between an official exchange rate of Z$55 to the US dollar and a "parallel market" rate now spiralling towards 2,000 means that where possible, businesses keep their foreign earnings out of the country.

A fuel deal with Libya which allowed payment in local currency and produce is near collapse because the beef, sugar, coffee and tobacco Harare promised in return is too scarce to send.

The deal, intended to deliver 70% of Zimbabwe's fuel needs, is also allowing Libyans access to some of the farmland in theory intended for the landless.

And Libya is also keen on taking over pipelines held by state oil company Noczim, as well as other government assets.

Corruption

Mr Midzi is resisting the temptation to raise fuel prices, saying it would hit Zimbabwean consumers already stricken by severe food shortages exacerbated by price controls.

He also defended the conduct of Noczim, whose officials have been accused in the Herald of wanting to scrap the Libya deal.

Instead, the Herald alleged, they wanted to return to spot deals which would bring them foreign currency to trade on the parallel market.

Zimbabwean economists have long accused the government of refusing to devalue in part because of the profits to be made by sustaining the parallel rates while controlling the main source of foreign currency.