Kenya now imports more oil from UAE to meet local demand amidst high prices
NAIROBI, Kenya - The Kenya National Bureau of Statistics provisional trade data reveals that the United Arab Emirates has surpassed India to become the country’s second-largest source market after China on the back of soaring oil prices.
According to the Provisional trade data released last Friday, expenditure on imports which are mainly petroleum products from the Middle East has more than doubled in the first six months of 2022.
This reflects the continuously rising cost of fuel, which has hit most businesses and households across the country, forcing them to dig deeper into their pockets for survival.
These data reveal that Kenyan traders spent a record Sh177.88 billion to buy goods from the oil-rich country, more than double, or 131.90 percent jump over Sh77.39 billion in a similar period last year.
That has placed the UAE second in Kenya’s top import markets, above India whose consignments in the country shot up 36.61 percent in the review period to Sh150.25 billion.
China remained on top with imports growing at a slower rate of 9.12 percent year-over-year to Sh227.95 billion in the six-month period.
The Russia-Ukraine war has continued to cause oil prices to surge earlier this year, with Brent — the global benchmark— trading above $130 per barrel as western powers retaliated by imposing sanctions on Russia, which last year accounted for 14 percent of global supply.
For instance, the landed cost of Murban oil, which Kenya uses, was about $104.48 per barrel in June, a 64.92 percent rise from $63.35 a year earlier.
Despite the oil prices dropping slightly but still this is not enough to ease the pain felt by consumers at the pump.
Central Bank of Kenya cited that Murban oil last Thursday traded at $88.64 per barrel compared with $94.93 for the same quantity a week earlier, largely on reduced demand amid renewed restrictions in China to curb Covid-19.
The costs of energy and transport have a significant weighting in the basket of goods and services that is used to measure inflation in the country. Inflation, a gauge for the cost of living over a 12-month period, increased at the fastest rate of 8.5 percent in 62 months.
Producers of manufactured goods, services such as electricity generators as well as large-scale farms factor in the higher cost of petroleum products in their product pricing.
KNBS data shows traders shipped in fuel and lubricants worth Sh305.19 billion, a 91.86 percent climb over Sh159.07 billion in the prior period last year. The bulk of petroleum products in Kenya are sourced from the UAE, making it a large source market.