President Bola Tinubu’s new executive order on oil and gas revenue remittances has triggered fresh debate over transparency, regulatory stability and the limits of executive power in Nigeria’s petroleum sector. The directive, signed on February 13 and announced by the Presidency on February 19, orders the direct remittance of oil and gas revenues to the Federation Account and seeks to eliminate what the government described as wasteful deductions and duplicative structures.
The Presidency said the order was introduced to safeguard federation revenues, improve accountability and ensure that funds due to the federal, state and local governments are not trapped in layers of retention and charges. Reuters reported that the reform targets revenues from petroleum operations in a bid to strengthen public finances, while the Presidency said it would curb leakages in one of Nigeria’s most critical revenue-generating sectors.
Implementation of the directive has already begun. According to reports, the Federal Government has directed NNPC Limited to stop collecting the 30 per cent management fee and the 30 per cent frontier exploration fund deduction from profit oil and profit gas under production sharing contracts. Remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund have also been suspended under the new framework.
However, the order has drawn criticism from organised labour and industry stakeholders. The Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has called for the withdrawal of the directive, arguing that it could undermine the Petroleum Industry Act and create uncertainty in the sector. The union warned that an executive order should not override a law passed by the National Assembly and said abrupt changes to funding structures could weaken investor confidence. Concerns have also been raised over the effect of the policy on the cash flow and operational stability of major institutions in the sector, including NNPC Limited and the Nigerian Upstream Petroleum Regulatory Commission. Some analysts said the government must ensure that the new remittance structure does not disrupt core regulatory and operational functions.
Despite the pushback, the government has pressed ahead, setting up an implementation process and signalling that the order is intended to align petroleum revenue management with constitutional provisions. As debate continues, attention is now shifting to whether the government will modify the framework after consultations with unions, regulators and other industry players.
