Kenya’s re-exports of jet fuel to the United Arab Emirates (UAE) surged more than sixtyfold in three months through June 2024, shining a spotlight on trade dealings with the Middle East country that ships in the largest volumes of petroleum products.
Official data shows the oil-rich country ordered kerosene-type jet fuel valued at Sh27.44 billion between April and June, a jump of 6,079.50 percent over Sh444.12 million in a similar period a year ago.
The amount generated from re-exports of aviation oil to the UAE was higher than earnings from top domestic exports such as coffee and apparel and clothing accessories, an analysis of the second quarter trade data released by the Kenya National Bureau of Statistics shows.
It was only lower than what Kenya earned from tea and horticulture exports in the three-month period.
The Emirates has over the years been ranked amongst the world’s top 10 producers of jet fuel, exporting to other countries including Kenya.
The huge bump in the jet fuel re-exports catapulted the Gulf’s second-largest economy to become the Kenya’s top destination market by value in the second quarter of 2024, moving six places from position seven the year before.
The Energy and Petroleum Regulatory Authority (Epra) maintained that Kenya does not ship out aviation fuel to overseas countries such as the UAE.
The sector regulator, however, explained the Kenya Revenue Authority (KRA), the main source for trade data used by the KNBS, officially captures the commodity as a re-export when foreign airlines fuel planes at Nairobi’s Jomo Kenyatta International Airport.
“KNBS in their report captures it [aviation fuel] as a re-export because when OMCs [oil marketing companies] fuel international airlines such as Emirates, the value of fuel is considered by KRA as a re-export,” Daniel Kiptoo, the director-general at Epra, told the Business Daily.
The UAE’s two national carriers — Dubai-based Emirates and Abu Dhabi-based Etihad — operate flights to more than 100 destinations across the world from JKIA.
Re-exports of jet fuel has become a major foreign exchange earner for Kenya behind tea and horticulture, underlining Nairobi’s status as an aviation hub in Africa.
Further analysis of the KNBS data reveals the USA, the Netherlands and Saudi Arabia as other global destinations of jet fuel re-exports from Kenya.
The data shows Oman, also a Middle-East nation which shares a border with the UAE, is among countries whose shipments of aviation fuel to Kenya has this year jumped significantly.
Oman exported jet fuel worth Sh22.95 billion in three months through June 2024 and Sh28.14 billion in the first quarter, according to KNBS data. The State-run statistician numbers did not capture the value of jet fuel imports from Oman in the second quarter of 2023.
As result of the significant climb in jet fuel re-exports, the UAE leapfrogged Uganda, the Netherlands, Pakistan, the US, Tanzania and the UK to become Kenya’s biggest export market by value in the second quarter of the year.
This is after Kenya’s total export earnings from the UAE climbed more than twofold, or 211.51 percent, in the review quarter to Sh37.49 billion from Sh12.04 billion a year earlier.
Top exports to the UAE have traditionally been goat meat and fermented black tea.
During the April-June 2024 review period, orders of fermented black tea and partly fermented tea from the Middle East’s economic powerhouse fell by nearly half (48.94 percent) to Sh1.85 billion from Sh3.62 billion the year before.
Exports of goat meat, on the other hand, fetched Sh2.30 billion, a marginal 2.20 percent drop from Sh2.35 billion in the same period last year.
The development has come at a time Kenya and the UAE are looking to conclude long-standing negotiations for a comprehensive preferential trade pact.
The Emirates — which has successfully ploughed oil wealth into other sectors, from tourism to real estate — has been keen on growing non-oil trade and investments with Kenya, while Nairobi is seeking to increase exports of livestock and tea.
Negotiating teams from Nairobi and Abu Dhabi last year held three rounds of technical negotiations under the Kenya-UAE Comprehensive Economic Partnership Agreement (CEPA), which seeks to deepen trade and investment ties with a focus on non-oil goods.
“Through the CEPA, the UAE and Kenya aim to remove trade barriers on a wide range of goods and services, creating new opportunities for importers and exporters in both countries, and enabling Kenyan companies to leverage the value of the UAE’s geographical and logistical position,” the KNBS wrote in 2024 Economic Survey.
The UAE has been one of the most visited countries by President Ruto since he took power in September 2022.
“I am glad that the United Arab Emirates has shown interest in enhancing its presence in energy and technology in our country and the East African region,” Dr Ruto said on February 12 when he met UAE Minister for Industry and Advanced Technology Sultan Al Jaber.
The blossoming relationship has seen Nairobi and Abu Dhabi open talks over the UAE guaranteeing a $1.5 billion (about Sh194 billion) bond for budgetary support.
The proposed funding is aimed at filling the hole in the budget after the International Monetary Fund (IMF) delayed a disbursement which was expected in September. The multilateral lender failed to reach a deal with Kenya on future revenue plans in the aftermath of the withdrawal of the Finance Bill 2024.
The UAE also offered Kenya a Sh2 billion gift after floods and landslides hit East African country and reportedly paid for the private plane that took President Ruto to the US in May amid criticism of extravagance.
Abu Dhabi royal Tahnoon bin Zayed Al Nahyan, the UAE President’s brother, has association with a firm that formed a consortium with Safaricom for the rollout of the controversial universal Health coverage (UHC) programme.
