The shortage of US dollars is affecting the operations of oil marketers who ship in refined petroleum products — the country’s single largest import item by value.
Rubis Energy Kenya has disclosed the challenges in sourcing the foreign currency through which most international transactions are settled.
Manufacturers and other traders have also decried the dollar shortage, which has slowed down commercial transactions.
“The group’s exposure is mainly concentrated on the Ringardas (Nigeria), Rubis Energy Kenya, and Dinasa (Haiti) subsidiaries due to difficulties in sourcing USD,” French multinational Rubis said of the challenges facing its subsidiaries in its latest annual report.
The revelations by Rubis highlight the growing fears among manufacturers and importers who are facing increased costs of shipments and doing business.
Rubis and its sister company, Gulf Energy control a combined share of 11.3 percent in the Kenyan market behind TotalEnergies (16.4 percent) and Vivo — a retailer of Shell-branded products (21.7 percent).
It was not immediately clear whether the dollar shortages contributed to the recent fuel supply crisis that was witnessed across the country.
Local businesses say they now require days to weeks to obtain the dollars they need, with some banks resorting to rationing the hard currency.
Kenya Bankers Association has blamed the crisis on heightened demand for dollars, which has outstripped supply.
Oil products like petrol, diesel, kerosene and cooking gas form the single largest import bill for Kenya highlighting the critical role of the dollar in paying for the shipments.
The value of petroleum product imports rose to a new record of Sh335.3 billion last year, up from Sh201.1 billion in 2020.
The increase was driven by escalating prices of the commodity besides higher volumes purchased.
Kenya imported 6.1 billion litres of petroleum products last year compared to 5.5 billion litres in 2020.
The prices of the commodity meanwhile rallied sharply on the global economic recovery from the Covid-19 pandemic and the recent geopolitical shocks brought by Russia’s invasion of Ukraine.
Brent crude oil prices per barrel have jumped from lows of $9 in April 2020 to trade above $100.
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