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Professor Emeritus Wumi Iledare, an energy expert and petroleum economist, has responded to President Bola Tinubu’s recent Executive Order that mandates the restructuring of oil and gas revenue remittances to the Federation Account and eliminates the 30 percent management fee that was previously retained by the Nigerian National Petroleum Company Limited (NNPCL) on oil and gas profits.

Iledare characterized the order as a major fiscal intervention in Nigeria’s petroleum governance system.

On Wednesday, Tinubu released an Executive Order that required the direct remittance of royalty oil, tax oil, and profit oil to the Federation Account.

As stated by presidential spokesperson Bayo Onanuga, Tinubu indicated that the initiative is intended to improve transparency, minimize discretionary retention of funds, and reinforce statutory transfers to the three levels of government.

In response, Iledare remarked that the EO represents “a renewed effort to strengthen revenue transparency, reduce discretionary retention, and improve statutory remittances,” especially given the current budgetary pressures and debt sustainability issues.

He recognized the administration’s declared aims of protecting public revenues, reducing inefficiencies, and strengthening fiscal discipline, while pointing out that improving accountability in petroleum revenue flows is still a valid priority for public finance.

The petroleum economist, however, warned that some elements of the Executive Order are in direct connection with the provisions of the Petroleum Industry Act (PIA) 2021.

He stated that the National Assembly established statutory constructs like the Frontier Exploration Fund, the Midstream and Downstream Gas Infrastructure Fund, and existing Production Sharing Contract (PSC) fiscal structures, which may require legislative amendment for any substantive changes 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 emphasized the importance of making a clear distinction between contractual revenue allocations included in PSC agreements, corporate retained earnings of the Nigerian National Petroleum Company Limited, and statutory earmarked funds established under the PIA.

He cautioned that clear distinctions are essential to prevent the mixing up of discretionary fiscal practices and contractual entitlements.

Iledare remarked that although directly remitting royalty oil, tax oil, and profit oil to the Federation Account could improve transparency and decrease intermediation, it is crucial to implement this policy in a carefully planned manner in order to maintain contractual stability and avoid unforeseen legal issues or damage to investor confidence.

Iledare noted that the structural dual role of NNPCL—as a commercial operator and concessionaire under certain arrangements—has created institutional tensions within the post-PIA framework for a long time.

He called for reforms intended to bolster NNPCL’s commercial identity to be based on legal clarity and predictable governance mechanisms.

Iledare thus urged for immediate legislative consultation to guarantee statutory coherence, transparent engagement with stakeholders, clear implementation guidelines to protect contractual obligations, and a reform strategy 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.

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