By Obinna Uballa
Nigeria’s oil and gas industry is facing a mix of apprehension and praise following President Bola Tinubu’s Executive Order No. 9 of 2026, which directs that all oil and gas revenues due to the Federation – including royalty oil, tax oil, profit oil, and profit gas – be paid directly into the Federation Account for equitable distribution among federal, state, and local governments.
The directive, signed on February 13, also suspends certain revenue retention mechanisms previously allowed under the Petroleum Industry Act (PIA) 2021, including the Frontier Exploration Fund and Nigerian National Petroleum Company Limited (NNPCL)’s management fee on profit oil and profit gas.
The order has sparked uncertainty among key agencies such as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), NNPCL, and the Midstream and Downstream Gas Infrastructure Fund (MDGIF).
Officials expressed concerns over the absence of a clearly defined alternative funding framework to replace the internally generated revenues that had historically supported operations, staff welfare, and regulatory enforcement.
Punch Newspaper in a report quoted senior NUPRC officials who spoke on condition of anonymity to have warned that relying on conventional budgetary allocations through the National Assembly could undermine the commission’s operational independence and efficiency.
“The Petroleum Industry Act clearly provides for funding through the four per cent cost of collection. Can an Executive Order override an Act of the National Assembly?” one official asked, noting that the commission’s salaries, monitoring activities, field inspections, and other operational costs are funded through this mechanism.
Concerns also extended to frontier exploration and the country’s Reserve Replacement Ratio. The suspension of the Frontier Exploration Fund has created uncertainty around how the government plans to sustain and expand crude production, particularly with the ambition to reach three million barrels per day by 2030 and attract over $12 billion in annual investment.
At NNPCL, senior officials warned that redirecting revenues to the Federation Account could disrupt the monitoring and management of production sharing contracts (PSCs), affecting hundreds of personnel across deepwater operations and potentially undermining investor confidence. They noted that royalties and taxes are typically remitted in kind, as barrels of crude, rather than cash, making the direct remittance directive operationally complex.
Concerns were also raised about crude-backed loans and obligations, including the $3.175 billion secured in 2023, which require scheduled monthly repayments.
Workers’ unions have reacted strongly. The New Diplomat had reported that the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) faulted the order for its perceived threat to operational autonomy, financial stability, and staff welfare. Its president, Festus Osifo, warned that political interference could undermine professional management, while the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) called for an urgent stakeholders’ meeting to clarify the order’s scope and implications.
In contrast, oil marketers under the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) welcomed the directive, describing it as a bold step toward fiscal discipline, transparency, and improved investor confidence. PETROAN President Dr. Billy Gillis-Harry praised the order for reinforcing NNPCL’s transformation into a commercially disciplined entity and for promoting governance reforms akin to the Nigeria LNG Limited (NLNG) Bonny model, particularly at the Port Harcourt Refinery.
The Capital Market Academics of Nigeria (CMAN) also endorsed the order, citing its potential to ensure equitable revenue distribution across all tiers of government and improve budget implementation. CMAN President Prof. Uche Uwaleke called the directive one of the most courageous reforms of Tinubu’s administration, emphasizing the long-term benefits of fiscal transparency for public accountability and economic growth.
Meanwhile, economists and energy law experts have urged caution, highlighting potential legal and operational challenges. Professor Ayo Ayoade of the University of Lagos noted that executive orders cannot override Acts of the National Assembly and cautioned that direct remittance of revenues must align with existing legal frameworks to avoid disrupting critical operations.
Similarly, Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, stressed the need for a structured transition to maintain investor confidence, protect ongoing contractual obligations, and preserve operational stability at both NNPC and NUPRC.
