The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has vehemently rejected President Bola Tinubu’s recent executive order directing the immediate remittance of all oil and gas revenues directly into the Federation Account.
The union, representing senior staff in the nation’s vital energy sector, argues that the directive represents a “direct attack” on the landmark Petroleum Industry Act (PIA) of 2021 and could trigger widespread instability, including the loss of up to 4,000 jobs at the Nigerian National Petroleum Company Limited (NNPCL).
The executive order, signed by President Tinubu on February 18, 2026, and effective from February 13, mandates that royalty oil, tax oil, profit oil, profit gas, and other revenues from production sharing, profit sharing, and risk service contracts be paid straight into the Federation Account Allocation Committee (FAAC).
Anchored on Sections 5 and 44(3) of the 1999 Constitution, the move aims to eliminate what the presidency describes as “wasteful deductions” by intermediaries, particularly the NNPCL, and restore full constitutional entitlements to federal, state, and local governments.
Officials estimate this could inject an additional N14.57 trillion into government coffers, based on projections from 2025 remittances, including N906.91 billion in management fees and frontier exploration funds previously retained by the NNPCL, plus N7.55 trillion in royalties and N611.42 billion in gas flaring penalties.
At a press conference in Lagos on Thursday, PENGASSAN President Festus Osifo lambasted the order as a “dangerous precedent” that undermines the PIA’s framework for sector reform and stability. “This executive order is a direct attack on the PIA,” Osifo declared, emphasizing that it contravenes key sections of the act, such as those governing the NNPCL’s operational autonomy and funding mechanisms.
He warned that stripping the NNPCL of its 30% management fee on profit oil and gas, along with the 30% allocation for the Frontier Exploration Fund, could lead to operational disruptions, erode investor confidence, and result in mass redundancies.
Osifo urged the president to withdraw the directive immediately and pursue any necessary changes through legislative amendments rather than unilateral action, claiming Tinubu had been “wrongly advised” and that the order threatens the industry’s hard-won progress.
The PIA, enacted in 2021 after years of debate, was designed to overhaul Nigeria’s oil and gas sector by creating a more transparent, investor-friendly environment. It allowed the NNPCL to retain 60% of profits from production sharing contracts—split between management fees and frontier exploration—to fund operations and new discoveries.
Critics of the old system, however, have long accused it of enabling revenue leakages and unchecked spending, with the NNPCL often criticized for opaque deductions that shortchange the Federation Account.
The new order repositions the NNPCL as a purely commercial entity, redirects gas flaring penalties to the Federation Account instead of the Midstream and Downstream Gas Infrastructure Fund, and forms a joint project team to streamline upstream and midstream operations under the Nigerian Upstream Petroleum Regulatory Commission.
While PENGASSAN’s stance has sparked debate, not all voices align with the union. Finance and economic experts have hailed the order as a “bold and historic” step to plug fiscal loopholes and enhance transparency.
An economist noted that direct remittances could prevent legal challenges and boost market stability, though he cautioned that implementation must be sequenced carefully to avoid disrupting contracts.
On social media platform X, reactions were mixed, with some users accusing PENGASSAN of protecting vested interests in the “old corrupt playbook” while others praised the order as a “revolution against revenue vampires.” One post highlighted the order’s 10 key features, including the elimination of speculative spending, and labeled opponents as “wicked.”
The controversy comes amid broader economic pressures in Nigeria, where oil remains the lifeblood of the economy, accounting for over 90% of foreign exchange earnings. With global energy transitions accelerating, stakeholders fear that policy instability could deter international investors already wary of Nigeria’s regulatory environment.
PENGASSAN’s call for reversal echoes past labor disputes in the sector, but the Tinubu administration has yet to respond publicly, leaving the fate of the order—and its potential ripple effects—hanging in the balance.
As the dust settles, analysts suggest this could test the government’s resolve to reform entrenched interests in the oil industry. For now, the standoff underscores the delicate balance between fiscal discipline and operational sustainability in Africa’s largest oil producer.
WHAT YOU SHOULD KNOW
President Tinubu’s executive order mandating full, immediate remittance of oil and gas revenues to the Federation Account seeks to eliminate leakages and boost government funds, but PENGASSAN warns it seriously undermines the PIA framework that was carefully designed to give the NNPCL operational autonomy and funding stability.
The single most important point: this move risks destabilizing Nigeria’s oil industry, eroding investor confidence, and potentially costing thousands of jobs at the NNPCL—all without going through the proper legislative process required to amend the PIA.
