Low oil prices stir up festivities despite economic gloom : The Standard

A drop in global oil prices saved Kenyans from what would be a gloomier Christmas even as export earnings shrunk and the economy stagnated. Export earnings in the third quarter of 2019 dropped to Sh147.7 billion compared to Sh152.1 billion in the same period in 2018. However, a drop in the global prices of commodities, especially oil which dropped by 12 per cent, helped offset the loss, propping up the Shilling during this period. “In the third quarter of 2019, the volume of trade declined compared to the same quarter of 2018. The reduction could be attributed to 3.2 per cent decrease in total exports to Sh145.9 billion and 4.9 per cent decline in imports to Sh410.5 billion,” said the Kenya National Bureau of Statistics in a recent report.

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The value of imports during the period under review declined by 5.3 per cent to Sh147.5 billion compared to Sh152.1 billion in the same period in 2018.  However, with bad weather, imports of processed food and beverages more than doubled to Sh9.7 billion in the third quarter of 2019 compared to the same quarter in 2018. This saw the share of food and beverages to the total imports increase by 2.6 percentage point in the review period.

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As a result, Kenyans who had been grappling with a tough environment which saw the economy grow at 5.1 per cent in the third quarter, were spared further financial strain. The economy expanded by six per cent in the third quarter of 2018. Kenya paid Sh67.7 billion for petroleum imports - a significant drop-down compared to Sh76.7 billion in the same period in 2018.

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Petroleum is a major determinant of the cost of living affecting transport, manufacturing, power and even agriculture sectors. In December, motorists enjoyed some slight reprieve at the pump after prices of petroleum products declined. Petrol, diesel and kerosene declined by Sh1.09, Sh2.83 and Sh1.75 respectively in Nairobi from mid-December 2019, according to the monthly pricing review.

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ChristmasFuel pricesFestivity