A dispute has emerged over President Bola Tinubu’s executive order on oil revenue remittances, as the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) called for the immediate reversal of the directive, describing it as inconsistent with the provisions of the Petroleum Industry Act (PIA).
The executive order, signed on February 18, mandates the direct payment of royalty oil, tax oil, profit oil and profit gas into the Federation Account Allocation Committee, effectively preventing the Nigerian National Petroleum Company Limited from making deductions at source.
The directive seeks to ensure that all revenues accruing to the federation under production sharing, profit sharing and risk service contracts are paid directly into the federation account. While some stakeholders, including Capital Market Operators, have expressed support for the move, the development has generated opposition within the oil and gas industry.
Reacting to the directive on Thursday, PENGASSAN President, Festus Osifo, criticised the policy, warning that it could undermine the legal framework established under the Petroleum Industry Act.
Speaking to journalists, Osifo argued that Sections 8, 9 and 64 of the PIA clearly define the powers, responsibilities and operational framework of the Nigerian National Petroleum Company Limited, maintaining that statutory provisions enacted by the National Assembly cannot be amended or overridden through an executive order.
“An executive order cannot supersede an Act of the National Assembly. The PIA is very explicit on the structure and governance of NNPC Limited. Any alteration must follow due legislative process,” he said.
Osifo acknowledged that the president has constitutional authority to issue executive directives but stressed that such powers must operate within the confines of existing legislation. He cautioned that any perceived breach of the Petroleum Industry Act could introduce uncertainty into the oil and gas sector.
According to him, policy unpredictability remains a major concern for investors, noting that actions capable of weakening the sanctity of established laws could discourage both domestic and foreign investment.
“Nigeria has worked hard to reposition its oil and gas sector through the PIA. We must avoid actions that could send conflicting signals to the global investment community,” he stated.
The union leader also expressed concern over potential operational implications for the Nigerian National Petroleum Company Limited, particularly in relation to financial planning and contractual obligations.
He warned that sudden changes to revenue remittance structures could affect cash flow management, joint venture commitments and other statutory responsibilities of the national oil company.
Osifo further suggested that the president might not have been fully briefed on the wider implications of the order, referencing Tinubu’s professional background in the oil sector, including his previous association with ExxonMobil, and noting that a more detailed briefing could have produced a different approach.
He added that PENGASSAN remains committed to engaging the Federal Government through dialogue but would continue to defend the integrity of the Petroleum Industry Act and the interests of its members.
The controversy adds to ongoing national discussions surrounding fiscal transparency, revenue management and corporate governance reforms within Nigeria’s oil industry.
