By Osordi Ayomide
The President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has raised strong concerns over a newly signed executive order by President Bola Ahmed Tinubu, describing it as a direct affront to the Petroleum Industry Act (PIA) and a potential threat to investment inflow into Nigeria’s oil and gas sector.
Addressing a press conference attended by senior union officials, zonal leaders, members of the press and other stakeholders, the PENGASSAN President said the union was compelled to respond to what he termed a troubling development that emerged through a statement issued by the President’s Special Adviser on Information and Strategy, Bayo Onanuga.
On February 18, 2026, Onanuga announced that President Tinubu had signed Executive Order 9 of 2026, with effect from February 13, 2026.
The directive seeks to curb what the presidency described as wasteful spending and multiple layers of deductions by the Nigerian National Petroleum Company Limited (NNPC Ltd), in a move aimed at boosting remittances to the Federation Account.
Key provisions of the order include prohibiting NNPC Ltd from collecting and managing the 30 per cent Frontier Exploration Fund and the 30 per cent management fee on profit oil and gas revenues, mandating oil and gas operators under Production Sharing Contracts to remit Royalty Oil, Tax Oil, Profit Oil, Profit Gas and other government entitlements directly to the Federation Account, suspending payments of Gas Flare Penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF), directing instead that such payments go into the Federation Account, establishing an implementation committee comprising the Minister of Finance, the Attorney-General of the Federation, and the Minister of State for Petroleum Resources (Oil).
According to the presidency, the move is intended to restore constitutional revenue entitlements to federal, state and local governments, which it claims were impacted under the PIA framework.
However, PENGASSAN described the directive as inconsistent with the provisions of the PIA enacted in August 2021 after over a decade of legislative effort.
“The executive order signed by the President is a direct attack on the provisions of the PIA, particularly Sections 8, 9 and 69,” the union leader said. “An executive order cannot overrule an Act of the National Assembly.”
He maintained that while the union understands the President’s drive to increase government revenue and attract foreign investment, the action could undermine legal certainty in the sector.
“What are we telling investors?” he asked. “That with a single executive order, an existing law can be altered or set aside? This creates uncertainty and may erode the confidence painstakingly built since the PIA was passed.”
He argued that before the enactment of the PIA, investment in the oil and gas industry had declined significantly due to regulatory ambiguity.
The law, he said, restored some level of certainty and began attracting capital back into the sector.
The PENGASSAN President suggested that the President may have been misinformed about certain aspects of the industry’s financial structure.
“There is a provision in the executive order suggesting that 30 per cent of revenue from Production Sharing Contracts goes to NNPC. That is not accurate,” he stated. “What goes to NNPC is about two per cent, while the Frontier Exploration Fund and other remittances are clearly structured under the PIA.”
He described the order as evidence of continued political interference in NNPC operations, despite its transition to a limited liability company under the PIA framework.
“When NNPC was converted to a limited liability company, it was meant to reduce political interference and allow the board and management to run it professionally. This executive order raises questions about that independence,” he added.
On the broader economic implications, the union warned that policy instability could deter foreign direct investment in a capital-intensive industry that remains Nigeria’s main foreign exchange earner.
“Our major revenue earner is oil and gas. If investment declines due to uncertainty, production will drop. That affects foreign exchange earnings and, ultimately, the value of the naira,” he said.
He noted that while government efforts to increase revenue are commendable, unintended consequences such as reduced investor confidence could outweigh short-term fiscal gains.
Drawing comparisons with emerging oil-producing nations like Ghana, he cautioned that investors have alternatives and may redirect capital to more stable jurisdictions if Nigeria’s regulatory environment becomes unpredictable.
Responding to questions from journalists, the PENGASSAN President said the union had initially been informed that a bill to amend aspects of the PIA would be presented before the National Assembly for stakeholder engagement.
“We were preparing to engage on a proposed bill. Instead, it came as an executive order. We were not carried along,” he said.
He stressed that institutions such as the Office of the Attorney-General should advise the President where legal boundaries are at risk of being crossed.
“As a union, we sometimes end up doing the job of government institutions. It should be the responsibility of the Attorney-General to advise the President on legal implications,” he stated.
PENGASSAN said it would continue consultations with sister unions, including the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), and other industry stakeholders.
“This is the first step. We will engage with facts. Our executive council will meet next week to determine the next line of action,” the President said, warning that failure to address the matter could trigger industrial relations challenges across the sector.
He reiterated that since 1970, PENGASSAN has consistently advocated for policies that strengthen the oil and gas industry, arguing that its survival is crucial to Nigeria’s broader economic stability.
“If the oil and gas industry survives and grows, the economy grows. We must not jeopardize a law that took over 10 years to enact,” he concluded.