The Presidency has defended President Bola Tinubu's Executive Order halting revenue deductions by the Nigerian National Petroleum Company Limited (NNPCL) and other agencies, insisting that the directive was rooted in constitutional provisions and not in violation of the Petroleum Industry Act (PIA).
The response followed a protest by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) at the NNPC Towers in Abuja on Friday, where the union accused the President of breaching the PIA through his revenue retention order.
PENGASSAN argued that the directive undermined the operational independence of NNPCL and could cripple its ability to fund operations and meet statutory obligations, including contributions to the Frontier Exploration Fund for hydrocarbon exploration in 2026. The union also threatened further action if the Federal Government failed to reverse the order.
However, the Special Adviser to the President on Information and Strategy, Bayo Onanuga, dismissed the union's position, describing it as a misinterpretation of constitutional supremacy over statutory laws.
Keep up with the latest headlines on WhatsApp | LinkedIn
"PENGASSAN is focusing on PIA alone. The President's action is based on the Nigerian Constitution, which PIA violates in allowing the deductions that the President has now stopped. PIA is not superior to our constitution," Onanuga stated.
He further described the union's protest as premature.
"PENGASSAN should have read the constitution before making its knee-jerk reaction," he said.
Onanuga explained that the Executive Order derives its authority from Section 5 of the 1999 Constitution, which vests executive powers of the Federation in the President, including the responsibility to uphold the Constitution and implement federal laws.
He added that the directive is also anchored on Section 44(3) of the Constitution, which vests ownership and control of all minerals, mineral oils and natural gas in the Government of the Federation.
According to the presidential aide, the Executive Order seeks to restore constitutional revenue entitlements of the Federal, State and Local Governments allegedly eroded by provisions of the PIA enacted in 2021.
"The PIA created structural and legal channels through which substantial Federation revenues are lost through deductions, sundry charges and fees," Onanuga stated.
The Presidency maintained that the directive is aimed at plugging revenue leakages and ensuring that funds constitutionally due to the three tiers of government are fully remitted to the Federation Account.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
The Petroleum Industry Act was signed into law in August 2021 by former President Muhammadu Buhari, granting NNPCL significant operational and financial autonomy. The Act allows the national oil company to retain revenues for reinvestment before remitting proceeds to the Federation Account.
Section 54 of the Act exempts NNPCL from the Fiscal Responsibility Act and permits it to operate on commercial terms without certain government financial regulations.
The dispute sets the stage for a potential legal and policy confrontation between organised labour in the oil and gas sector and the Federal Government over the interpretation of constitutional and statutory provisions governing Nigeria's petroleum revenues.
