Zimbabwe's has passed laws ordering that imported petrol be blended with 10 percent of locally-produced ethanol in a drive to lower fuel import bills, the energy regulator said.

"The government has increased the mandatory blending of anhydrous ethanol with unleaded petrol from five percent to 10 percent," Gloria Magombo, chief executive officer of the Zimbabwe Energy Regulatory Authority (ZERA) said in a statement.

The new rules take effect from Thursday, although wholesalers and retailers have up to 10 days to clear their stock.

Magombo said the "country is set to save about US$4 million every month in imports through mandatory blending," or about 10 percent of funds the landlocked southern African spends on fuel imports.

Sources in the energy sector and economists said that Zimbabwe spends between $40 million (29 million euros) and $45 million (33 million euros) on importing fuel.

The cash-strapped country first introduced compulsory blending of five percent ethanol, a sugar-based biofuel with unleaded petrol, early this year.

"Ethanol blending contributes towards energy security of the country, reduces the fuel import bill, creates employment and has the potential for power generation," said Magombo.

Zimbabwe produces sugar cane in the southeast of the country.