Union says directive stripping NNPC of deduction powers could undermine investor confidence…
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has called on President Bola Tinubu to immediately recall the recent executive order directing the direct remittance of oil and gas revenues to the Federation Account.
The directive, signed on February 18, mandates that revenues previously deducted at source by the Nigerian National Petroleum Company (NNPC) Limited be paid directly into the Federation Account Allocation Committee (FAAC).
But speaking at a press briefing on Thursday, PENGASSAN National President, Festus Osifo, described the move as a “direct attack” on the Petroleum Industry Act (PIA), arguing that it conflicts with key statutory provisions.
“The executive order that was signed by the president is a direct attack on the PIA,” Osifo said, specifically referencing Sections 8, 9 and 64 of the Act.
‘Executive Orders Cannot Override the Law’
Osifo maintained that while the president has the constitutional authority to issue executive orders, such directives cannot supersede existing legislation passed by the National Assembly.
“Executive orders cannot override the provision of a law,” he said. “You cannot use an executive order to set aside a law of the Federal Republic of Nigeria.”
He likened the action to a hypothetical scenario in which an executive order alters statutory pension contributions or overrides the authority of the Independent National Electoral Commission (INEC), describing the development as “quite troubling” and “an aberration.”
According to him, the order sends the wrong signal to both domestic and international investors at a time when Nigeria is working to position its oil and gas sector as stable and investment-friendly.
Investment Concerns
Osifo argued that the PIA was painstakingly designed to create regulatory certainty and attract capital into Nigeria’s petroleum industry. Allowing an executive order to alter its framework, he warned, could weaken investor confidence.
He suggested that if fully briefed on the potential implications particularly given his industry background and previous experience at ExxonMobil the president might have reconsidered signing the order in its current form.
“We strongly believe the president has been misled,” Osifo said, adding that advisers may not have presented the full implications of the directive.
The union leader cautioned that international oil companies could fear that other fiscal provisions including royalty structures might one day be altered through similar executive instruments.
Risk to Jobs
Beyond legal and investment concerns, PENGASSAN warned of potential operational implications for NNPC Limited.
Osifo said that if the company is stripped of its revenue deduction powers without adequate safeguards, it may struggle to meet financial obligations, a development that could threaten job security for staff.
“If this order is not recalled, our members are in danger of being declared redundant because NNPC may not be able to meet their obligations,” he said.
Growing Debate
The executive order has triggered a wider debate over revenue management and the balance between fiscal transparency and operational autonomy within Nigeria’s oil sector.
While supporters argue the directive enhances transparency and boosts inflows to the Federation Account, critics including PENGASSAN contend that it risks creating legal uncertainty and undermining the stability framework established by the PIA.
As discussions intensify, attention will likely turn to whether the presidency clarifies, amends or maintains the order amid mounting industry pushback.
