NNPCL: Expert explains implications of Tinubu’s orders for direct oil revenue remittance

Energy expert and petroleum economist Professor Emeritus Wumi Iledare has reacted to President Bola Tinubu’s recent Executive Order directing the restructuring of oil and gas revenue remittances to the Federation Account and removing the 30 percent management fee previously retained by the Nigerian National Petroleum Company Limited, NNPCL, on oil and gas profits.

Iledare described the order as a significant fiscal intervention within Nigeria’s petroleum governance framework.

Tinubu had on Wednesday issued the Executive Order mandating the direct remittance of royalty oil, tax oil, and profit oil to the Federation Account.

In a statement by a presidential spokesperson, Bayo Onanuga, Tinubu said the move is aimed at enhancing transparency, reducing discretionary retention of funds, and strengthening statutory transfers to the three tiers of government.

Reacting, Iledare said the EO signals “a renewed effort to strengthen revenue transparency, reduce discretionary retention, and improve statutory remittances,” particularly at a time of budgetary pressure and debt sustainability concerns.

He acknowledged the administration’s stated objectives of safeguarding public revenues, curbing inefficiencies, and enhancing fiscal discipline, noting that improving accountability in petroleum revenue flows remains a legitimate public finance priority.

However, the petroleum economist cautioned that certain aspects of the Executive Order intersect directly with provisions of the Petroleum Industry Act (PIA) 2021.

According to him, statutory constructs such as the Frontier Exploration Fund, the Midstream and Downstream Gas Infrastructure Fund, and existing Production Sharing Contract (PSC) fiscal structures were established by the National Assembly and may require legislative amendment if substantive changes are to be made.

“While executive authority under Section 5 of the Constitution empowers the President to implement and enforce laws, substantive alterations to statutory fiscal frameworks may require legislative amendment to ensure constitutional alignment and institutional certainty,” he stated.

Iledare further stressed the need to clearly distinguish between contractual revenue allocations embedded in PSC agreements, corporate retained earnings of Nigerian National Petroleum Company Limited, and statutory earmarked funds created under the PIA.

He warned that clarity in these distinctions is critical to avoid conflating contractual entitlements with discretionary fiscal practices.

On the direct remittance of royalty oil, tax oil, and profit oil to the Federation Account, Iledare noted that while the policy could enhance transparency and reduce intermediation, its implementation must be carefully sequenced to preserve contractual stability and prevent unintended legal or investor confidence challenges.

Iledare also observed that the structural dual role of NNPCL—as both a commercial operator and concessionaire under certain arrangements—has long presented institutional tensions within the post-PIA framework.

He urged that reforms aimed at reinforcing NNPCL’s commercial identity be anchored in legal clarity and predictable governance mechanisms.

Iledare therefore called for prompt legislative consultation to ensure statutory coherence, transparent stakeholder engagement with operators and investors, clear implementation guidelines to safeguard contractual obligations, and a sequenced reform approach that balances fiscal urgency with institutional stability.

“Nigeria’s petroleum sector remains central to national economic stability. Reforms that improve transparency and fiscal integrity are welcome. However, sustainable reform must align with constitutional processes, statutory frameworks, and investor predictability,” he said.

NNPCL: Expert explains implications of Tinubu’s orders for direct oil revenue remittance