Market News

Imports from UAE nearly double on oil price jump

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Fuel tankers refill at the Kisumu oil depot. FILE PHOTO | NMG

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Summary

  • The value of Kenya’s imports from the United Arab Emirates (UAE) nearly doubled in the first seven months of the year, driven by higher oil prices.
  • The UAE is Kenya’s main source of petroleum fuel imports, which the country has been importing in the refined state since the Mombasa refinery was shut down in September 2013.

The value of Kenya’s imports from the United Arab Emirates (UAE) nearly doubled in the first seven months of the year, driven by higher oil prices that have pushed the cost of importing fuel into the country to a 26-month high.

The UAE is Kenya’s main source of petroleum fuel imports, which the country has been importing in the refined state since the Mombasa refinery was shut down in September 2013.

Imports from the UAE rose by 83 percent in the seven months to Sh88.3 billion from Sh48.1 billion last year, the fastest rate of growth among Kenya’s major import markets.

Imports from Saudi Arabia, which is also an exporter of petroleum, fertiliser, and plastics to Kenya, have gone up by 36 percent to Sh53.6 billion in the period.

In the seven months, the price of the UAE’s Murban crude has gone up by 63 percent, averaging $65.1 per barrel compared to $39.83 between January and July last year.

reduced demand

The price of oil was depressed last year due to reduced demand as many countries imposed travel restrictions to control the spread of the Covid-19 virus.

Murban crude is currently selling at $73 a barrel, pointing to an even higher import bill to the UAE in the second half of the year.

This has seen the prices of a litre of petrol and diesel in Nairobi go up to new all-time highs of Sh134.72 and Sh115.60 respectively.

The UAE is, however also an important source of consumer goods for Kenya such as electronics, whose consumption has gone up as the economy continues to recover from last year’s slump.

This recovery has also boosted the volume of machinery and industrial goods imports, helping grow imports from China—Kenya’s biggest source of imports—by 29 percent to Sh247.3 billion in the period.

Imports from India, the second-largest source market, have increased by 17 percent to Sh130.3 billion.

Overall, Kenya’s trade deficit widened by 35.6 percent to Sh740.5 billion in the first seven months to July, with the imports growing by 28 percent to Sh1.168 trillion while exports rose by 16 percent to Sh428.2 billion.