The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has strongly opposed President Bola Tinubu’s recent Executive Order directing that oil and gas revenues be paid straight into the Federation Account.
The union described the move as troubling and warned that it could weaken the Petroleum Industry Act (PIA) while shaking investor confidence in the sector.
PENGASSAN President, Festus Osifo, called for the immediate reversal of the directive, maintaining that an executive order cannot supersede a law duly passed by the National Assembly.
President Tinubu’s order requires that proceeds from royalty oil, tax oil, profit oil, profit gas, and other earnings from production sharing contracts be remitted directly to the Federation Account. It also eliminates the 30 percent Frontier Exploration Fund provided for under the PIA and ends the 30 percent management fee on profit oil and gas previously retained by the Nigerian National Petroleum Company Limited (NNPCL). According to the Presidency, the decision is aimed at protecting national revenue and preventing excessive deductions.
However, Osifo insisted that the directive effectively overrides critical sections of the PIA, a law that took more than a decade to put in place. He challenged claims that NNPCL keeps 30 percent of production sharing contract revenues, arguing that the actual figure is less than two percent.
He also explained that the Frontier Exploration Fund is paid into a separate, designated account not directly to NNPCL and suggested that the President may have been misinformed by advisers who failed to fully explain how the industry’s financial structure operates.
Read also: Tinubu Issues Order to End Excessive Oil Revenue Deductions
