PENGASSAN Kicks Against Tinubu’s Executive Order on Oil, Gas Revenues

By Adedapo Adesanya

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has faulted the Executive Order signed by President Bola Tinubu on oil and gas revenues.

President Tinubu this week signed the Executive Order, titled The Upstream Petroleum Operations Cost Efficiency Incentives Order (2025), to safeguard and enhance oil and gas revenues for the Federation, curb wasteful spending, eliminate duplicative structures in the sector, and redirect resources for the benefit of the Nigerian people.

However, at a press conference in Abuja, PENGASSAN president, Mr Festus Osifo, argued that the tax incentives granted to oil companies by the President may not help in the reduction of cost if insecurity is not addressed.

“The Executive Order signed by the President yesterday is a direct attack on the provisions of the Petroleum Industry Act (PIA)—specifically Sections 8, 9, and 64,” Mr Osifo said.

“What the President has done is use an Executive Order to set aside a law of the Federal Republic of Nigeria. This is deeply troubling. What signal are we sending to investors and the international community?

“We are effectively telling them that the law of the land can be set aside by a simple executive decree. This is an aberration and should never have happened.”

According to a statement by the presidential spokesperson, Mr Bayo Onanuga, the President signed the EO in pursuance of Section 5 of the Constitution of the Federal Republic of Nigeria (as amended).

The Executive Order is anchored on Section 44(3) of the Constitution, which vests ownership, control, and derivative rights in all minerals, mineral oils, and natural gas in, under, and upon any land in Nigeria—including its territorial waters and Exclusive Economic Zone—in the Government of the Federation.

The directive seeks to restore the constitutional revenue entitlements of the federal, state, and local governments, which were removed in 2021 by the Petroleum Industry Act (PIA).

According to Mr Onanuga, the PIA created structural and legal channels through which substantial Federation revenues are lost via deductions, sundry charges, and fees.

Under the current PIA framework, NNPC Limited retains 30 per cent of the Federation’s oil revenues as a management fee on Profit Oil and Profit Gas derived from Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts. Additionally, the company retains 20 per cent of its profits for working capital and future investments.

The federal government considers the additional 30 per cent management fee unjustified, as the 20 per cent retained earnings are already sufficient to support NNPC Limited’s functions under these contracts.

Moreover, NNPC Limited also retains another 30 per cent of profit oil and profit gas under the Frontier Exploration Fund, as stipulated in sections 9(4) and (5) of the PIA.