The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has kicked against President Bola Tinubu’s recent Executive Order mandating the direct remittance of all oil and gas revenues to the Federation Account.
The union warns that the directive is a “direct attack” on the Petroleum Industry Act (PIA) and could lead to significant job losses and a decline in investor confidence.
A statement released by the Presidency on Wednesday, February 18, indicated that the executive order was signed by President Tinubu on February 13.
The order directs that royalty oil, tax oil, profit oil, profit gas, and other revenues due to the Federation under production sharing, profit sharing, and risk service contracts be paid directly into the Federation Account.
The order revoked the PIA’s 30 per cent Frontier Exploration Fund and terminated the Nigerian National Petroleum Company Limited’s 30 per cent management fee deducted from profit oil and profit gas.
Addressing a press conference in Lagos on Thursday, February 19, PENGASSAN national president, Festus Osifo, called on President Tinubu to withdraw the Executive Order, arguing that it cannot supersede the PIA, a law enacted by the National Assembly in 2021.
Osifo pointed out that Sections 8, 9, and 64 of the PIA specifically granted these deduction powers to NNPC and warned that setting aside an Act of Parliament by executive fiat creates a “dangerous precedent.”
While acknowledging that the President has a right to enact executive orders and also a responsibility to safeguard the oil and gas industry, Osifo, however, claimed that the President was misled by his advisers in issuing the order.
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Pinnacle Daily reports that Tinubu had stated that the order was based on Sections 5 and 44(3) of the 1999 Constitution (as amended), claiming that the move was required to protect oil and gas revenues, reduce wasteful deductions, and restore constitutional entitlements of the federal, state, and local governments to the Federation Account.
Osifo countered the claim by the government that 30 per cent of profit oil and profit gas is retained by NNPC as management fee and 30 per cent of the Frontier Exploration Fund. According to him, what NNPC gets as management fee is somewhere below two per cent and 30 per cent of the Frontier Exploration Fund goes to a separate account, not NNPC. “There is a Frontier Exploration Account where the money goes. It does not go to NNPC as a company,” Osifo stated.
Concern for NNPC Workers
Beyond the legal challenge, the PENGASSAN president claimed that stripping NNPC of its revenue streams may cripple the company’s ability to fund its operations. He warned that this could make about 4,000 NNPC workers redundant, as the company might struggle to meet salary and operational obligations under the new revenue model.
Fear of Investor Flight
Osifo stressed that the oil and gas industry is capital-intensive and relies on long-term policy certainty.
He argued that this sudden change could erode investor confidence, leading to reduced production. Since oil is Nigeria’s primary source of foreign exchange, a drop in earnings would directly pressure the naira, weaken the purchasing power of all Nigerians, and fuel inflation, he asserted.
He called on President Tinubu to immediately recall the Executive Order and pursue any desired changes to the PIA through a proper executive bill that allows for legislative scrutiny and stakeholder engagement.
He further stated that PENGASSAN plans to continue consultations with its sister union, NUPENG, and other industry stakeholders to determine their next course of action.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in mass communication.
