The decision by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to challenge the Federal Government’s new executive order on oil revenue remittance has ignited a necessary national conversation.
At stake is not merely the technical question of where petroleum earnings are paid, but the broader issue of how Nigeria manages its most strategic economic asset within the bounds of law and institutional stability.
President Bola Tinubu recently signed an executive order directing that proceeds from royalty oil, profit oil, tax oil, and gas be paid directly into the Federation Account. The administration argues that the measure is intended to block leakages, enhance transparency, and strengthen public revenue at a time of fiscal strain.
Few Nigerians would oppose greater accountability in oil revenue management. For decades, opacity in the petroleum sector has fueled public distrust. However, PENGASSAN’s criticism highlights an equally important concern: whether the executive order aligns with the provisions of the Petroleum Industry Act (PIA), a comprehensive reform law painstakingly negotiated and passed after more than ten years of debate.
The union argues that altering revenue mechanisms through an executive directive risks sidestepping legislative intent. This is not a trivial matter. The PIA restructured the former state oil corporation into the commercially driven Nigerian National Petroleum Company Limited (NNPCL), clearly defining revenue flows, operational responsibilities, and governance standards. If these arrangements are to be modified, the constitutional route is amendment through the National Assembly not executive substitution.
Recent reactions illustrate why caution is necessary. Within days of the announcement, industry stakeholders raised concerns about regulatory certainty. In a climate where international oil companies are divesting from onshore assets and redirecting capital to more stable environments, Nigeria’s ability to attract investment depends heavily on policy predictability. Investors are wary of abrupt changes that may affect contractual frameworks or financial planning.
There is also a historical lesson here. Previous attempts to reform the oil sector whether in subsidy management, joint venture cash calls, or fiscal terms often faltered when consultation was inadequate. The drawn out passage of the PIA itself was partly due to disagreements among government agencies, lawmakers, host communities, and industry players. That hard-earned consensus should not be lightly unsettled.
At the same time, government’s objective of safeguarding public funds cannot be dismissed. Nigeria is grappling with rising debt servicing obligations, pressure on foreign reserves, and widespread economic hardship. Ensuring that oil revenues are fully accounted for is a legitimate policy priority. But reform must strengthen institutions, not create fresh uncertainty.
This moment calls for measured dialogue rather than confrontation. The executive should clearly outline the legal foundation and fiscal data underpinning the directive. Labour unions and industry operators, in turn, should present evidence based arguments to support their concerns. If amendments to the PIA are required to improve revenue efficiency, they should proceed transparently through legislative review.
Nigeria’s oil and gas sector remains the backbone of national finance. Decisions affecting it must inspire confidence both at home and abroad. Reform is necessary, but it must be anchored in legality, consultation, and long-term vision.
In the end, accountability and stability are not opposing goals. They are complementary pillars of sound governance. The challenge before policymakers is to ensure that in seeking to protect national revenue, they do not inadvertently weaken the institutional framework designed to secure it.
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