President Tinubu to Present Petroleum Industry Act Amendments to National Assembly

President Bola Tinubu intends to present legislative proposals to the National Assembly for amendments to specific sections of the Petroleum Industry Act (PIA). The proposed changes aim to address Nigeria's contemporary economic realities.

Senator Sani Musa, who chairs the Senate Committee on Finance, announced this development on Thursday. The announcement was made during a budget defense session attended by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and the Minister of Budget and Economic Planning, Atiku Bagudu. Officials from the Nigeria Revenue Service, the Tax Ombudsman Office, the Nigerian Customs Service, and the Office of the Attorney-General of the Federation were also present at the committee's oversight meeting.

During the session, Mr. Musa discussed President Tinubu's recent executive order that mandates the direct remittance of oil and gas revenues into the Federation Account. He explained that while many anticipate this order will significantly boost government income, Nigeria has not yet reached its desired revenue targets. He clarified that the push to improve revenue collection, spurred by the executive order, is the driving force behind the President's decision to propose amendments to the PIA.

Senator Musa did not specify which clauses of the law would be subject to amendment. "When the president signed the executive order, the assumption in Nigeria today is that more money will come to the government. We’ve not yet transitioned to where we want to be and that is why Mr President said he’s bringing the PIA for amendment," he stated.

He further noted that projections and adjustments stemming from the executive order will be integrated into the planning framework for the 2026 budget. "Projections that we’ll do and the adjustment we’ll do now based on this directive of this order will also form part of the planning in the 2026 budget," he added.

Earlier on Wednesday, President Tinubu signed an executive order requiring that all royalty oil, tax oil, profit oil, profit gas, and other revenues owed to the Federation under various contract types, including production-sharing, profit-sharing, and risk-service contracts, be paid directly into the Federation Account.

The order also rescinded the 30 per cent Frontier Exploration Fund, which was established under the PIA, and terminated the 30 per cent management fee that the Nigerian National Petroleum Company Limited (NNPCL) retained on profit oil and profit gas.

The presidency justified the directive, citing Sections 5 and 44(3) of the 1999 Constitution. The stated objectives include protecting oil and gas revenues, reducing excessive deductions, and ensuring that federal, state, and local governments receive their constitutional entitlements from the Federation Account.

However, the decision has faced opposition from certain industry stakeholders. The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) on Thursday publicly rejected the order, characterizing it as a detrimental precedent that could weaken the PIA and diminish investor confidence. PENGASSAN's president, Festus Osifo, expressed the association's concern and called for the immediate withdrawal of the directive.

The Petroleum Industry Act, enacted in 2021, was designed to overhaul Nigeria's oil and gas sector, addressing governance, regulatory, and fiscal structures after years of stalled reform efforts. The law facilitates the commercialization of NNPCL, establishes new regulatory bodies for upstream and downstream operations, restructures revenue allocation, and introduces provisions for host community development.