President Mugabe has ordered petrol stations to slash the price of fuel by 70 per cent in a desperate bid to bring down the world’s highest rate of inflation. Mr Mugabe ordered the price of fuel to be cut to 18p per litre, as his politburo announced plans to “tighten and intensify” price controls.

Shops have already been ordered to reduce prices as the President seeks to beat hyper-inflation that he fears may spark civil unrest and drive him from power.

State radio called on the movement of war veterans — a reserve unit of the armed forces made up of former guerillas who fought to end white rule more than 25 years ago — the youth militia and the women’s league of Mr Mugabe’s ZANU(PF) party, to report to party headquarters. Observers believe that the groups have been summoned to support trade inspectors, police and state secret agents in enforcing the price cuts.

Supermarkets, shops and warehouses are being forced to sell produce at prices far below the cost of replacing stock. The operation has been accompanied by state-approved looting as hungry Zimbabweans, impoverished by Mr Mugabe’s ruinous economic policies, loaded cheap goods — which were often resold on the black market the same day at far higher prices.

Lawyers have denounced the forced price cuts as illegal, while many businessmen have been arrested for failing to comply. “It’s all by edict in the state press,” said one lawyer who asked not to be named. “And even if they did make it official, it would be in violation of the Constitution, for depriving people unlawfully of their property. It is legalised looting and legalised theft.”

Mr Mugabe’s onslaught is seen as a response to repeated forecasts that Zimbabwe’s wild inflation will bring the economy to a halt within six months and cause civil upheaval that will drive him from power.

“Mugabe is taking these forecasts very seriously,” John Makumbe, a political commentator, said. “But he thinks he can bring down inflation by manipulating it manually. He doesn’t realise it will rocket even higher. It’s unbelievable.” Yesterday, traders in the capital’s predominantly Indian business area had placed detachable steel-grilled gates outside their shop doors, ready to be shut at short notice.

Shortly after dawn, hundreds of cars began queuing at service stations in the city, after state radio announced that fuel would have to be sold at $Zim 55,000 (about 18p) per litre. It had been selling for $Zim 180,000 per litre. “This is going to be a very short honeymoon,” John Robertson, an economist, said. “There will be no fuel to be had anywhere in the country by the middle of next week. That will bring an end to all business activity. A shutdown of the entire country is coming. In a week’s time, people are going to be struggling to find food.”

Mr Mugabe told supporters that any businesses that halted production because of the price cuts would be forcibly nationalised. “We are saying to all factory owners ‘you must produce’,” Mr Mugabe said. “If you don’t produce, we certainly will seize the factories.”

Losing control

- Inflation for May was announced to be 4,500 per cent, although economists say that the real figure is closer to 10,000 per cent

- The movement of war veterans, the youth militia and the women’s league of Zanu (PF) have been used repeatedly to crush dissent, and to drive 5,000 white farmers from their farms

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