PRESIDENT Bola Tinubu’s power to override the Nigerian National Petroleum Company Limited (NNPCL) on revenue remittance with an executive order is being questioned in several quarters.
Some oil and gas governance experts differ in their stance, with some also noting that the Petroleum Industry Act (PIA) should be amended since it is already an act of the parliament passed and signed by the executive.
On Wednesday, February 18, Tinubu signed an executive order directing remittance of oil and gas revenues to the Federation Account Allocation Committee (FAAC).
By this order, all taxes, royalties and profits under Production Sharing Contracts (PSC) are to be fully remitted to the federation account.
The order, the Presidency said, would safeguard and enhance oil and gas revenues for the federation, curb wasteful spending and eliminate duplicate structures in the oil and gas sector.
According to the order, which has been officially gazetted, the NNPC will no longer collect and manage the 30 per cent frontier exploration fund.
Similarly, all operators/contractors of oil and gas assets held under a Production Sharing contract shall, from the date the order was issued, pay royalty oil, tax oil, profit oil, profit gas, and any other interest due to the government of the federation directly to the federation account.
The Presidency said Tinubu had also suspended payments of the has flare penalty into the midstream and downstream gas infrastructure fund.
However, in a statement, Wumi Iledare, an oil governance expert and a professor Emeritus of Petroleum Economics, told The ICIR that there were some merits and demerits in the order.
He noted that the order represented a significant fiscal intervention within Nigeria’s petroleum governance framework and signaled a renewed effort to strengthen revenue transparency, reduce discretionary retention, and improve statutory remittances to the three tiers of government.
He emphasised that apart from the intent to safeguard revenues, certain aspects of the order intersected directly with provisions of the Petroleum Industry Act (PIA) 2021.
Citing an instance, Iledare argued that the Frontier Exploration Fund, the Midstream and Downstream Gas Infrastructure Fund, and existing Production Sharing Contract (PSC) fiscal structures were statutory constructs established by the National Assembly.
While executive authority under Section 5 of the Constitution empowers the president to implement and enforce laws, Iledare pointed out that substantive alterations to statutory fiscal frameworks might require legislative amendment to ensure constitutional alignment and institutional certainty.
On the question of direct remittance of royalty oil, tax oil, and profit oil to the Federation Account, he said the order had the potential to enhance transparency and reduce intermediation.
He stated, however, that the implementation must be carefully sequenced to preserve contractual stability and avoid unintended legal or investor confidence challenges.
Iledare also observes that the structural dual role of NNPC Limited — as both commercial operator and concessionaire under certain arrangements — has long presented institutional tensions within the post-PIA framework.
“Any reform aimed at reinforcing NNPC’s commercial identity must be anchored in legal clarity and predictable governance mechanisms,” he stressed.
Making a similar submission, the Lead Director of the Centre for Social Justice, Eze Onyekpere, said the instrument of an executive order did not confer legislative powers on the president.
He clarified further executive order is issued as a supplement to the proper execution of existing legislation.
“A bill passed by the National Assembly and assented to by the President can only be amended by a subsequent act of the parliament. The president cannot use an executive order to vary, suspend or rewrite a validly enacted act,” he added.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.