The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has demanded that President Bola Tinubu should immediately withdraw his recent Executive Order requiring oil and gas revenues to be paid directly into the Federation Account, saying that the directive could destabilize the energy sector and put approximately 4,000 jobs at risk.
The association’s President, Comrade Festus Osifo, who made the demand during a chart with journalists, argued that the order conflicted with the provisions of Petroleum Industry Act (PIA) 2021.
He clarified: “What are we telling the investors? What are we telling the international community? That just with an executive order, you can set aside the law of the land? This is an aberration. This should never have happened.
“The actual percentage that gets there eventually is somewhere below two percent and the 30 percent Frontier Exploration Fund does not go directly to NNPC Limited but into a designated Frontier Exploration Account. Some provisions in the EO did not tell the entire truth”, Osifo added.
- Advertisement -
While emphasizing the transparency of the current system, the labour leader pointed out that statutory royalties were being paid directly into government coffers rather than being controlled personally by regulators.
The labour leader warned that if the newly issued Executive Order is implemented, thousands of workers in the hydrocarbon resources industry would lose their jobs
Osifo maintained: “If this is allowed to sit through the way it is today, in the next few months, our members are in danger of being declared redundant because the company may not be able to meet their obligations,” he said.
Recalling the prolonged efforts that led to the passage of the PIA, the labour leader said the legislation was meant to restore predictability after years of dwindling investment in the industry.
He said: “We had to believe that with that piece of legislation, there would be some level of certainty in the industry. The people who are coming to invest will know what the rules of engagement are. If you don’t stabilise your own environment, the investors will take their money elsewhere.
“Our major revenue earner as a country is oil and gas. The more money we earn from the industry, the more we can defend our naira.
“If production is impacted and foreign exchange earnings reduce, it will affect our exchange rate, and once the exchange rate is impacted, it will affect our pockets.
“It is not a one-dollar business. It is a multi-billion-dollar industry. That is why we must not allow investors to flee.
“The information at our disposal was that there was going to be a bill. But instead of a bill, it came as an executive order. We were not carried along in any way”, the PENGASSAN leader added.
It would be recalled that newspapers and online media on Thursday widely reported that President Bola Tinubu had ordered the immediate stoppage of management and frontier exploration fees being deducted by the Nigerian National Petroleum Company Limited (NNPCL), and payment henceforth of the fees and other revenues by the company directly to the Federation Account.
The directive, which was conveyed to the management of the state-controlled oil company in a new Executive Order signed last week, was made public on Wednesday in a statement issued by the Federal Ministry of Finance.
According to the ministry, the order seeks to realign oil and gas revenue administration with constitutional provisions and end sundry practices that had in the past reduced revenue inflows into the Federation Account.
Under the new framework, taxes, royalties, and profit oil from Production Sharing Contracts (PSCs) must now be remitted directly to the Federation Account and effectively block deductions by the NNPCL at revenue source.
Similarly, the Executive Order, which is aimed at restoring transparency and boosting oil revenues due to the Federation, also suspends NNPC’s collection of management fees, halts frontier exploration deductions and stops gas flare penalty payments into the Midstream Gas Infrastructure Fund.
The order further clarifies regulatory roles between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and established an inter-agency implementation committee, chaired by the Minister of Finance and Coordinating Minister of the Economy, to oversee its implementation.
