HARARE - Zimbabwe has struck a deal to import crude oil from Equatorial Guinea and is planning to reopen a refinery to process fuel and ease acute shortages, state media reported yesterday.

HARARE - Zimbabwe has struck a deal to import crude oil from Equatorial Guinea and is planning to reopen a refinery to process fuel and ease acute shortages, state media reported yesterday.

Crunch shortages of fuel, foreign currency and food are a sign of Zimbabwe's deep economic crisis, blamed on President Robert Mugabe's policies, and also marked by the highest inflation rate in the world at nearly 8000percent.

TheHerald newspaper reported yesterday that Zimbabwe had signed a deal to buy crude oil from Equatorial Guinea, with which it has forged close ties after it helped foil an alleged coup in the oil-rich West African country in 2005.

"Following our engagement with Equatorial Guinea... Zimbabwe can now even get crude oil and arrange for its refinement through third parties," TheHerald quoted industry and international trade minister Obert Mpofu saying.

The report did not give further details and Mpofu was not immediately available for comment.

Zimbabwe agreed in 2005 with Iran to revive an oil refinery built using Iranian technology. Work at the refinery has not yet started.

Mpofu said Zimbabwe was also looking at possible crude oil imports from Angola.

Last month, Mugabe officially launched a R41million bio-fuel plant with a capacity to produce 100million litres of diesel a year, saying the country was moving to resolve shortages that continue to grip the economy.

Critics blame Mugabe for ruining one of Africa's brightest economic prospects through policies such as the seizure of farms from whites to resettle landless blacks. - Reuters