Business
Boosting Domestic Oil Refining
Tinubu’s Naira Crude Sale to Spur Domestic Refining and Strengthen Naira
President Bola Tinubu’s decision to sell crude oil to the Dangote Petroleum Refinery in naira is expected to lead to a significant reduction in the prices of domestically refined petroleum products. This move has been lauded by oil marketers, refiners, and experts, who believe it will enhance the output of domestic refineries, bolster the country’s foreign exchange reserves, and strengthen the naira.
The downstream oil sector has welcomed the initiative, highlighting its potential to stabilize pump prices and the dollar-naira exchange rate. This new directive, announced by the President’s Special Adviser on Information and Publicity, Bayo Onanuga, via his official X handle, mandates the Nigerian National Petroleum Company Limited to sell crude to the Dangote refinery and other upcoming refineries in naira.
This policy is seen as a game-changer that will eliminate the need for international letters of credit and save the country billions in import costs. By denominating crude oil transactions in naira, the government anticipates saving approximately $7.3 billion annually, significantly reducing monthly forex expenditure on petroleum products from $660 million to $50 million.
Special Adviser on Revenue Zacch Adedeji emphasized that this shift will mitigate Nigeria’s reliance on foreign exchange for crude oil imports, easing economic predictability and reducing forex fluctuations. The Federal Executive Council’s approval of this initiative is expected to bring a price advantage to local consumers and stabilize fuel prices.
Oil marketers and operators of modular refineries have praised the initiative, seeing it as a pivotal development that will lower the cost of petrol and boost the naira’s value. They believe this move will strengthen Nigeria’s oil sector, enhance local refineries’ operations, and support the country’s economic growth.
Bitcoin has soared to a new all-time high, briefly surpassing $106,000 (£83,890) on Monday during Asian trading hours. The cryptocurrency’s unprecedented rally marks a 50% surge since Donald Trump’s victory in the U.S. presidential election on November 5, with market sentiment buoyed by the incoming administration’s pro-cryptocurrency stance.
The Trump administration has signaled a friendlier approach to digital currencies compared to its predecessor. Notably, President-elect Trump recently announced plans to explore creating a national Bitcoin reserve, akin to the U.S. strategic oil reserve, to support the cryptocurrency’s strategic adoption.
Peter McGuire of trading platform XM.com attributed the surge to growing “FOMO” (fear of missing out) among investors. “The Bitcoin rally since the election has been parabolic,” McGuire explained. “Many investors believe $120,000 is achievable by the end of the year, and projections for mid-2025 suggest prices could exceed $150,000.”
Adding to the market optimism, Trump has appointed David Sacks, a Silicon Valley entrepreneur and former PayPal executive, as his AI and cryptocurrency czar. Sacks, known for his close ties to Trump advisor and billionaire Elon Musk, is expected to play a significant role in shaping the administration’s blockchain and cryptocurrency policies.
Chinese crypto entrepreneur Justin Sun, known for his headline-grabbing antics, recently made waves after consuming a $6.2 million banana in an art stunt. Not long after, Sun invested $30 million into World Liberty Financial, a cryptocurrency firm with ties to former President Donald Trump.
The investment proved transformative for the struggling company, pushing it past the threshold needed for Trump to begin profiting from the venture. Trump and his family are now positioned to collect around $20 million, with the potential for more.
Sun, currently facing fraud charges in the U.S. over his own crypto operations, did not elaborate on why he backed the untradable token initiative. However, the move has raised concerns among ethics experts, who view it as an example of how Trump’s vast business interests could create avenues for influence.
Richard Painter, former White House ethics lawyer under George W. Bush, noted the heightened risk:
“The conflicts have grown substantially with the scope of his business empire.”
Trump’s spokeswoman, Karoline Leavitt, dismissed concerns, highlighting that Trump had distanced himself from his real estate empire during his presidency and donated his salary:
“Unlike most politicians, President Trump didn’t get into politics for profit – he’s fighting because he loves this country.”
Critics argue that Trump has not adequately addressed the potential for corruption as his business dealings expand ahead of a possible return to the White House.
Constellation Brands announced Tuesday that it will sell its Svedka vodka brand to New Orleans-based Sazerac, as part of a strategic move to optimize its wine and spirits portfolio amid declining performance in the segment.
- The deal is anticipated to close within the coming months, though the financial terms were not disclosed.
- Bill Newlands, Constellation’s CEO, described the transaction as aligning with efforts to reshape the portfolio for growth, adding, “This transaction is another step forward in seeking to ensure that our wine and spirits portfolio is optimized to succeed.”
- Constellation’s wine and spirits business has struggled compared to its thriving beer portfolio, which includes bestsellers Modelo and Corona.
- Shipments for the segment fell by 9.8% year-over-year in Q2.
- Net sales and operating income dropped 12% and 13%, respectively.
- CEO Newlands cited headwinds in the lower-priced wine and spirits category as a persistent challenge during the company’s October earnings call.
- Despite accounting for only 5% of Constellation’s total volumes in 2023, wine and spirits contributed 17% of net sales, with wine taking the lion’s share at 86% compared to 14% from spirits.
- Sazerac will integrate Svedka into its diverse portfolio, which already includes global brands such as:
- Buffalo Trace bourbon
- Fireball Cinnamon Whisky
- Southern Comfort
- Constellation will retain key spirits labels, including:
- High West Whiskey
- Mi Campo Tequila
- Casa Noble Tequila
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