The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has rejected President Bola Tinubu’s newly signed Executive Order directing that oil and gas revenues be paid directly into the Federation Account. The union described the move as a dangerous precedent that could weaken the Petroleum Industry Act (PIA) and discourage investment in the sector.
President Tinubu signed the order mandating that revenues from royalty oil, tax oil, profit oil, profit gas, and other earnings under production and profit-sharing contracts be remitted directly to the Federation Account. The directive also removes the 30 percent Frontier Exploration Fund under the PIA and ends the 30 percent management fee on profit oil and gas previously retained by NNPC Limited.
Reacting at a press conference in Lagos, PENGASSAN President Festus Osifo expressed concern, arguing that an executive order cannot override an existing law passed by the National Assembly. He maintained that the order effectively sets aside key provisions of the PIA, which took over a decade to enact.
According to Osifo, the President may have been misinformed about certain financial arrangements under the PIA. He disputed claims that NNPC retains 30 percent of revenue from production-sharing contracts, stating that the actual figure is below two percent. He also clarified that funds allocated for frontier exploration do not go directly to NNPC but into a designated account.
The Presidency had justified the order by citing constitutional provisions and the need to protect oil revenues, reduce excessive deductions, and ensure proper remittance to federal, state, and local governments. However, PENGASSAN warned that bypassing the legislative process could send negative signals to investors and undermine confidence in the PIA.
Osifo noted that prior uncertainty in the oil and gas sector led to reduced investments and declining rig counts before the PIA was passed in 2021. He cautioned that altering the law through an executive order could reverse recent gains and create further instability.
The union also raised concerns about job security, warning that up to 4,000 NNPC workers could be affected if the order disrupts the company’s financial structure. PENGASSAN stressed that its position is not about protecting narrow interests but about safeguarding the broader economy, given the oil sector’s critical role in Nigeria’s foreign exchange earnings.
The association has called on President Tinubu to withdraw the order and pursue any proposed changes through an executive bill in the National Assembly instead. It also expressed disappointment over the silence of the National Assembly and the Attorney-General’s office on the matter.
PENGASSAN said it would continue consultations with other industry stakeholders, including NUPENG, and announce further actions in due course.
