United Arab Emirates has leapfrogged India to become Kenya’s second largest source market after China on the back of soaring oil prices, official statistics show.
Provisional trade data on Friday showed expenditure on imports — largely petroleum products — from the Middle East more than doubled in the first six months of the year, reflecting runaway cost of fuel, which has hit businesses and households hard.
Kenya 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, according to the Kenya National Bureau of Statistics.
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.
The data says expenditure on petroleum products was higher than on goods such as pharmaceuticals, vehicles as well as steel and iron which come from India.
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 jump in expenditure on goods from the UAE came in a period oil prices hit an all-time high, particularly in the early days of Russia’s assault of Ukraine late February.
The invasion caused 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 example, the global cost of Murban oil — whose refined product is what Kenya uses— was about $118.74 per barrel at the end of June, 63. 10 percent climb over $72.80 a year earlier.
Oil prices have since fallen slightly, but not at levels to ease the pain felt by consumers at the pump.
For example, Murban oil last Thursday traded $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”, according to the Central Bank of Kenya.