Oil Agencies Raise Alarm Over Cash Flow After Executive Directive
By ESTHER McWILLIS-IKHIDE
Uncertainty Trails Presidential Revenue Directive
FRESH uncertainty has gripped Nigeria’s oil and gas sector following President Bola Tinubu’s executive order mandating the immediate remittance of oil and gas revenues to the Federation Account for distribution among the three tiers of government.
The directive, which reinforces Section 162 of the Constitution, halts the retention of certain internally generated revenues by key institutions, including the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian National Petroleum Company Limited (NNPC), and the Midstream and Downstream Gas Infrastructure Fund.
While state governments are expected to benefit from increased allocations, apprehension has deepened within affected agencies over funding stability and operational autonomy.
NUPRC: Questions Over Statutory Funding
Senior officials at NUPRC argue that the Petroleum Industry Act (PIA) deliberately structured the commission’s funding to ensure independence and efficiency. A major concern centres on the four per cent cost-of-collection framework, which has served as a key operational funding source.
In 2025 alone, the commission reportedly generated over ₦322 billion from this mechanism, funding salaries, inspections, monitoring activities, and security logistics. Officials fear that reverting to traditional budgetary allocations could expose the regulator to bureaucratic delays and political pressure.
One senior official questioned whether an executive order could effectively override statutory provisions under the PIA, warning that funding uncertainty could weaken regulatory oversight in a sector already battling oil theft and vandalism.
Industry experts echo these concerns. Economist Muda Yusuf warned that forcing highly technical agencies into the conventional “budget envelope” system could paralyse operations and disrupt contractual obligations.
NNPC: Investor Confidence at Stake
At NNPC, concerns extend beyond cash flow to investor perception and deep-water production sharing contracts (PSCs). Officials explained that royalties and taxes under PSCs are often received in barrels of crude, not cash — meaning any abrupt shift in remittance structure could create administrative and contractual confusion.
With at least 400 personnel dedicated to overseeing PSC operations across multiple producing sites, insiders fear disruption could affect monitoring frameworks and existing crude-backed loan obligations secured in recent years.
However, another senior NNPC official struck a measured tone, stating that production and gas processing operations remain unaffected. According to him, management is reviewing its capital allocation strategy to align with the evolving fiscal framework while maintaining operational stability.
Labour, Marketers React
The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has called for an urgent stakeholders’ meeting to clarify the directive’s implications for workers and labour agreements.
Similarly, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) rejected the order, warning it could threaten staff welfare and institutional stability.
In contrast, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) backed the President’s move, describing it as a bold step toward transparency, fiscal discipline, and accountability.
Legal Debate Emerges
Energy law expert Prof. Ayo Ayoade cautioned that executive orders should not conflict with Acts of the National Assembly, stressing that the PIA remains a foundational law guiding the sector. However, some analysts argue that constitutional provisions may ultimately prevail if amendments become necessary.
As implementation begins, attention is shifting to the National Assembly, where the balance between executive authority and statutory independence may soon face a defining test.
For now, Nigeria’s oil sector stands at a crossroads — between fiscal reform ambitions and the operational realities of a complex, investment-driven industry.
