Tinubu’s direct oil revenue remittance order gains praise amid legal clarifications call

Energy expert and petroleum economist, Professor Emeritus Wumi Iledare, has weighed in on President Bola Tinubu’s recent Executive Order (EO) directing the restructuring of oil and gas revenue remittances to the Federation Account.

The order also eliminates the 30 percent management fee previously retained by the Nigerian National Petroleum Company Limited (NNPCL) on oil and gas profits.

President Tinubu, through the EO issued on Wednesday, mandated the direct remittance of royalty oil, tax oil, and profit oil into the Federation Account.

According to a statement by presidential spokesperson Bayo Onanuga, the move aims to enhance transparency, reduce discretionary fund retention, and strengthen statutory transfers to the three tiers of government.

Professor Iledare described the EO as a “significant fiscal intervention within Nigeria’s petroleum governance framework,” noting that it signals a renewed effort to strengthen revenue transparency, curb inefficiencies, and improve statutory remittances amid ongoing budgetary pressures and debt sustainability concerns.

“The administration’s objectives to safeguard public revenues, curb inefficiencies, and enhance fiscal discipline are legitimate public finance priorities,” Iledare said.

However, the petroleum economist cautioned that the EO intersects with provisions of the Petroleum Industry Act (PIA) 2021.

He pointed out that statutory constructs such as the Frontier Exploration Fund, the Midstream and Downstream Gas Infrastructure Fund, and fiscal arrangements under Production Sharing Contracts (PSCs) were established by the National Assembly.

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Altering these frameworks may require legislative amendments to ensure constitutional compliance.

“Executive authority empowers the President to enforce and implement laws, but substantive changes to statutory fiscal frameworks must be aligned with legislative provisions to maintain institutional certainty,” Iledare explained.

The expert further stressed the importance of distinguishing between contractual revenue allocations in PSC agreements, corporate retained earnings of NNPCL, and statutory earmarked funds under the PIA.

He warned that failure to clearly differentiate these could create confusion and undermine investor confidence.

On the direct remittance of royalties, tax oil, and profit oil to the Federation Account, Iledare acknowledged the potential for increased transparency and reduced intermediation. However, he emphasized that careful sequencing is essential to preserve contractual stability and prevent legal or investor-related challenges.

He also noted that NNPCL’s dual role as a commercial operator and concessionaire has long presented institutional tensions post-PIA.

According to Iledare, reforms intended to reinforce NNPCL’s commercial identity must be grounded in legal clarity and predictable governance mechanisms.

The expert called for prompt legislative consultation, transparent stakeholder engagement with operators and investors, and clear implementation guidelines to safeguard contractual obligations.

He stressed that reforms must balance fiscal urgency with institutional stability to maintain confidence in Nigeria’s petroleum sector.

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