….cites violation of PIA, wrong signals to investors
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has strongly rejected President Bola Tinubu’s Executive Order which mandates the Nigerian National Petroleum Company (NNPC) Limited to remit funds the Federation Account.
PENGASSAN described the executive order as a violation of the Petroleum Industry Act (PIA) and the Constitution and a troubling signal to the global investment community.
At a press conference in Lagos on Thursday, PENGASSAN President, Festus Osifo, said the Executive Order amounts to setting aside an extant Act of Parliament that took over two decades to enact. He argued that the President lacks the constitutional powers to override legislation through an executive instrument.
“This order sends a troubling signal to the global investment community that Nigeria cannot be trusted to keep its laws,” Osifo said.
“Investment in oil and gas is capital-intensive. Investors need stability, predictability and the assurance that the legal framework protecting their investments will not be arbitrarily altered.”
According to him, the directive could trigger significant capital flight, loss of investor confidence, and potential job losses across the oil and gas value chain. He warned that international oil companies may reconsider long-term commitments in Nigeria if regulatory certainty is undermined.
Osifo further alleged that individuals close to the President may have misadvised him into taking a step that could erode the gains achieved under the PIA, which restructured the industry and commercialised NNPC Limited.
PENGASSAN has commenced consultations with its sister union, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), while its National Executive Council is scheduled to meet next week to determine further action should the government fail to withdraw the order.
The development sets the stage for heightened tension in the oil sector, with labour unions warning of possible escalation if dialogue and stakeholder consultations are not prioritised.
President Bola Tinubu’s Executive Order on the NNPC signed on 13 February and publicly announced on February 18, 2026, directs that all oil and gas revenues — including royalty, tax, profit oil and profit gas — must now be paid directly into the Federation Account rather than being largely retained by NNPC under deductions allowed by the Petroleum Industry Act (PIA). The order removes NNPC’s entitlement to a 30 percent management fee on profit oil and profit gas and its 30 percent frontier exploration fund, curbs what the government calls wasteful and duplicative deductions, and aims to restore full constitutional revenue entitlements for the federal, state and local governments that were eroded under the PIA framework.
According to the government, the reform is meant to improve transparency, reduce fiscal leakages in Nigeria’s petroleum sector, and boost the funds available for public services and national development. It also addresses structural concerns about NNPC’s dual commercial and regulatory roles by requiring direct remittance of revenues and setting up committees to oversee implementation, while a broader Petroleum Industry Act review is planned.
SOURCE: Businessday
