Finance and economic experts have applauded President Bola Ahmed Tinubu for signing an Executive Order mandating the direct remittance of oil and gas revenues into the Federation Account, describing the move as bold, historic, and critical to fiscal transparency.
The order restructures certain financial provisions under the Petroleum Industry Act (PIA), particularly those that allowed the Nigerian National Petroleum Company Limited (NNPCL) to retain 30 per cent of profit oil for the Frontier Exploration Fund and another 30 per cent as management fees under Production Sharing Contracts (PSCs).
Under the new directive, these deductions have been halted, and proceeds including gas flare penalties previously paid into the Midstream and Downstream Gas Infrastructure Fund — will now flow directly into the Federation Account.
President of the Capital Market Academics of Nigeria (CMAN), Prof. Uche Uwaleke, described the move as a decisive correction of fiscal imbalance, noting that since the PIA’s implementation in 2021, only 40 per cent of PSC proceeds accrued to the Federation Account, while 60 per cent was retained by NNPCL.
He said restoring the larger share to the Federation Account strengthens equity among the three tiers of government and enhances service delivery capacity.
Similarly, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, called the order timely, citing persistent revenue shortfalls that have hampered budget implementation in recent years.
Managing Director of Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said the directive corrects long-standing anomalies that weakened government revenue flows.
Former Imo State governorship candidate, Ugwumba Uche Nwosu, described the decision as a necessary fiscal reform that deepens transparency and reinforces public trust in petroleum revenue management.
According to him, channeling NNPCL earnings directly into the Federation Account creates a framework for institutional oversight and aligns with global best practices in public financial management.
PENGASSAN Raises Concerns
However, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) expressed concerns that the Executive Order could disrupt operations and potentially lead to redundancies, urging a reconsideration of the directive.
While acknowledging the administration’s strides in attracting investments, the union warned that abrupt financial restructuring could undermine investor confidence and operational stability within the sector.
Despite these concerns, analysts maintain that the reform primarily targets revenue remittance structures rather than investor operations, arguing that proper transition management would prevent disruptions.
Observers say the Executive Order marks a significant shift in Nigeria’s oil revenue governance and could substantially boost allocations to the Federation Accounts Allocation Committee (FAAC), strengthening fiscal planning and macroeconomic stability nationwide.
