Refinery closure sees UAE lose Kenya trade to America
The Kenya Petroleum Refinery Limited plant in Mombasa. PHOTO | FILE
What you need to know:
Data from Kenya National Bureau of Statistics shows that UAE’s exports to Kenya shrunk 17 per cent to Sh79.9 billion in the nine months to September.
The KNBS has linked the drop to last year’s closure of Kenya’s sole refinery — which was buying most of its crude oil from the Middle East nation.
Oil marketers are now buying refined products from a wide range of traders in the Middle East, India, Mauritius and South Africa.
The closure of the ageing Kenya Petroleum Refineries Limited plant has seen the US overtake the United Arab Emirates (UAE) as Kenya’s source of imported goods.
The UAE’s exports to Kenya shrunk 17 per cent to Sh79.9 billion in the nine months to September, says data from the Kenya National Bureau of Statistics (KNBS).
The drop allowed the US to topple the emirate from the top three trading partner position it occupied last year, having dropped as the main seller of imported goods to Kenya in 2012.
The KNBS has linked the falling fortunes of UAE as Kenya’s top source of imported goods to last year’s closure of the country’s sole refinery — which was buying most of its crude oil from the Middle East nation.
“Imports from UAE have been going down as a result of the closure of the Kenya Petroleum Refineries Ltd,” said the KNBS in an e-mail response on the shifts in the imports market.
Oil marketers are now buying refined products from a wide range of traders in the Middle East, India, Mauritius and South Africa.
This saw India’s Essar Energy, which owned half of the refinery and the operator of the facility, abandon plans for a $1.2 billion (Sh108 billion) upgrade on the advise of consultants who said it was not economically viable.
Kenya’s government has agreed to pay Essar $5 million to buy the Indian firm’s half of the refinery after Essar exited the joint venture in November 2013.
It is yet to decide whether to turn East Africa’s only oil refinery into an oil storage facility or pay for its upgrade.
The reduced trading between Kenya and UAE comes amid aggressive increased exports to Kenya from the US since April.
Imports from the US, including planes, energy equipment and health kits stood at Sh120.3 billion in the nine months, up from Sh44.8 billion in the same period last year.
Kenya’s exports to the UAE also dropped in the nine-month period to Sh9.6 billion, down from Sh16.5 billion in the same period last year.
Nairobi exports avocados, black tea, cut flowers, carbonates of metals and sugar confectionary to Abu Dhabi.
China overtook India to become Kenya’s top source of imported goods in the period to September.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
