UAE beats India as top exporter of petroleum to Kenya

India has lost ground to the United Arab Emirates (UAE) as Kenya’s top supplier of petroleum amid a shrinking oil import bill linked to lower global prices.

Kenya’s fuel imports from New Delhi shrunk to Sh51.3 billion in the first 10 months of last year, from Sh89.1 billion in a similar period of 2015, representing a 42 per cent drop or a cutback of Sh37.8 billion.

Over the period, petroleum imports from UAE jumped 18 per cent to Sh58.1 billion in the review period, overtaking India as the single largest supplier of fuel consumed in Kenya, the Kenya National Bureau of Statistics (KNBS) data shows.

The Middle East nation has made a comeback on Kenya’s top import table for petroleum, having lost the position to India after the closure of Kenya’s only refinery in Mombasa in 2013.

Kenya now imports all of its refined products with the defunct refinery turned into a storage facility.

The country’s petroleum import bill narrowed by Sh30 billion to Sh167.8 billion in the year to October 2016, despite a sharp rise in consumption, official data shows.

This was helped by lower global prices which are, however, on the rebound following a recent pact by oil producers to cut production.

India had in recent years ramped up oil supply to Kenya on the strength of Gulf Africa Petroleum Corporation’s (Gapco) operations in Kenya, which is 76 per cent owned by Indian billionaire Mukesh Ambani’s Reliance Industries.

Gapco is now set to be acquired by French firm Total.

The firm has been Kenya’s largest oil importer for the past three years under the open tenders system (OTS) floated by the Ministry of Energy.

Under OTS, one marketer buys oil consignment in bulk to supply the rest of the industry, entitling the country to huge discounts. The system also made it possible for the energy regulator to introduce maximum price controls at the pump in December 2010, to cushion consumers from cartels in the industry.

The KNBS data shows that Kenya took in Sh34.7 billion worth of petroleum from Saudi Arabia in the year to October 2016, up from Sh25 billion a year earlier, making the Arab nation the third supplier of Nairobi’s fuel needs.

Bahrain comes in fourth with Sh4.2 billion worth of supplies, followed by Oman (Sh4.1 billion) and Sh3 billion for Netherlands.

The UAE was once Kenya’s top exporter of goods, mainly oil, but lost the pole position to India in 2012, which has since been overtaken by the bullish China.

The KNBS data shows that Abu Dhabi is now the third seller of goods to Nairobi at Sh79.6 billion in the year to October 2016, behind India (Sh170 billion) and China (Sh275 billion).

Kenya’s exports to the Middle East nation stood at Sh21.6 billion in the review period, including avocados, black tea, cut flowers, carbonates of metals and sugar confectionary.

Nairobi has signed deals with the UAE to offer jobs to Kenyans and help deal with the growing crisis of youth unemployment.

The Kenyan government said in January 2015 it had secured 100,000 jobs for Kenyans willing to work in Abu Dhabi but there has little update from the Foreign Affairs ministry on the implementation.