The Federal Government is facing growing resistance in the oil sector after the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) rejected President Bola Tinubu’s Executive Order. The order directs the Nigerian National Petroleum Company (NNPC) Limited to remit oil and gas revenues directly to the Federation Account.
The union says the directive violates the Petroleum Industry Act (PIA) and could weaken investor confidence in Nigeria’s energy sector.
Union Raises Legal and Investor Concerns
At a press conference in Lagos on Thursday, PENGASSAN President Festus Osifo said the Executive Order overrides key provisions of the PIA. Lawmakers took more than two decades to pass the Act. He argued that the President cannot set aside an existing law through an executive instrument.
Osifo also warned that changing the revenue structure under the PIA could unsettle international investors.
“Investment in oil and gas is capital-intensive,” he said. “Investors need stability and clear rules. When the government changes the legal framework suddenly, confidence drops.”
He added that the directive could drive capital out of the country, slow long-term investment, and threaten jobs across the oil and gas value chain.
What the Executive Order Says
President Bola Tinubu signed the Executive Order on February 13, 2026. The government announced it publicly on February 18. The directive requires NNPC Limited to pay all oil and gas revenues — including royalties, taxes, profit oil, and profit gas — directly into the Federation Account.
Under the PIA, NNPC retained certain deductions before remitting the balance. However, the new order removes the company’s 30 percent management fee on profit oil and profit gas. It also eliminates the 30 percent allocation to the frontier exploration fund.
Government officials say the reform will improve transparency and reduce fiscal leakages. They believe it will restore full constitutional revenue to federal, state, and local governments. In addition, authorities plan to create oversight committees to supervise implementation while they review the PIA.
Concerns Over Policy Direction
Osifo alleged that some advisers may have influenced the President’s decision without fully assessing the impact on industry reforms. He stressed that the PIA restructured the sector and transformed NNPC into a commercial entity. He warned that the new directive could reverse those gains.
Labour Response
PENGASSAN has started consultations with its sister union, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG). Its National Executive Council will meet next week to decide on possible actions if the government does not withdraw the order.
The dispute could heighten tension in the oil sector. Labour leaders say dialogue and stakeholder engagement remain the best path forward.
Overall, the standoff underscores the challenge of striking a balance between fiscal reform and regulatory stability in Nigeria’s petroleum industry.