PENGASSAN President Festus Osifo urges a review of the Petroleum Industry Act, warning that the Federal Government’s oil revenue executive order could undermine legal provisions and affect NNPC operations and investor confidence.
Oil Revenue Order: PENGASSAN Seeks PIA Review
By Juliet Ezeh
The President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Festus Osifo, has called for a comprehensive review of the Petroleum Industry Act, warning that the Federal Government’s recent oil revenue executive order could unsettle the legal framework guiding the sector.
Osifo, who spoke during an interview on Arise Television, argued that public discussions suggesting a direct 30 per cent deduction from production sharing contract revenues were inaccurate and potentially misleading.
How the 30 Per Cent Deduction Works
According to him, revenues generated under production sharing contracts undergo multiple statutory deductions before arriving at what is classified as profit oil or profit gas.
He explained that royalties, taxes and cost recovery expenses are first removed from gross revenue. The 30 per cent in question, he said, is calculated only after these deductions have been made.
“When you break it down properly, that 30 per cent is not from total revenue. It effectively amounts to about two per cent of overall PSC revenue,” he stated.
Osifo maintained that portraying the figure as a straight deduction from gross earnings misrepresents the structure of oil revenue allocation under existing regulations.
Concerns Over NNPC Operations
The union leader warned that withdrawing the affected portion of funds could have operational implications for the Nigerian National Petroleum Company Limited.
He noted that the retained percentage contributes to internal obligations, including salary payments and other operational costs across upstream, midstream and downstream segments.
Beyond workforce concerns, Osifo cautioned that abrupt regulatory adjustments could dampen investor confidence in Nigeria’s oil and gas industry.
“If investors perceive instability or inconsistency in policy implementation, it affects long-term investment decisions,” he said.
Executive Order and Legal Debate
The executive order, signed by Bola Tinubu on February 18, mandates that royalty oil, tax oil, profit oil and profit gas be remitted directly to the Federation Account Allocation Committee. The directive effectively removes the management fee and frontier exploration fund provisions previously retained under the PIA.
Osifo argued that while laws can be amended, such changes must pass through the National Assembly rather than being altered through executive directives.
He urged the President to constitute a review panel to assess the strengths and weaknesses of the PIA and forward proposed amendments to lawmakers for legislative consideration.
According to him, engaging labour unions and industry stakeholders in a transparent amendment process would ensure stability and clarity within the petroleum sector.
As debates continue over oil revenue remittances and regulatory authority, the development underscores broader concerns about balancing fiscal reforms with legal certainty in Nigeria’s energy industry.
Juliet Ezeh is the founder and chief reporter at Westbridge Reporters with over 7 years of experience in journalism. She covers crime, industry, policy, and social developments, delivering timely and accurate reporting.