The committee explained that the drive to enhance revenue generation through the executive order would prompt the president to propose the necessary amendments to the Petroleum Industry Act.
The Senate Committee on Finance has disclosed that President Bola Tinubu will soon transmit proposals to the National Assembly seeking amendments to certain provisions of the Petroleum Industry Act (PIA) to reflect Nigeria's current economic realities.
The Chairman of the committee, Sani Musa (APC, Niger East), disclosed this on Thursday when the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, and the Minister of Budget and Economic Planning, Atiku Bagudu, appeared before the committee to defend their proposals for the 2026 budget.
Heads of other agencies under the committee's oversight, including 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.
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During the meeting, Mr Musa spoke about President Tinubu's recent executive order mandating the direct remittance of oil and gas revenues to the Federation Account.
He said many people assumed the executive order would automatically boost government revenue. He explained that this was not necessarily the case, as Nigeria has yet to reach its desired revenue level.
The senator noted that the drive to enhance revenue generation through the executive order would prompt the president to propose the necessary amendments to the Petroleum Industry Act.
Mr Musa did not, however, specify the exact provisions of the law that would be affected by the proposed 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 said.
He added that projections and adjustments arising from the executive order would form part of the 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 stated.
On Wednesday, Mr Tinubu signed an executive order directing that royalty oil, tax oil, profit oil, profit gas, and other revenues due to the Federation under production-sharing, profit-sharing, and risk-service contracts be paid directly into the Federation Account.
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The order also scrapped the 30 per cent Frontier Exploration Fund established under the PIA and discontinued the 30 per cent management fee on profit oil and profit gas retained by the Nigerian National Petroleum Company Limited (NNPCL).
Anchoring the directive on Sections 5 and 44(3) of the 1999 Constitution (as amended), the presidency said the move was aimed at safeguarding oil and gas revenues, curbing what it described as excessive deductions and restoring the constitutional entitlements of federal, state and local governments to the Federation Account.
However, the decision has generated criticism from some stakeholders in the oil and gas sector. The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) on Thursday rejected the order, describing it as a dangerous precedent that could undermine the PIA and erode investor confidence.
The union's president, Festus Osifo, said at a press briefing that the association was troubled by the development and called for the immediate withdrawal of the directive.
The PIA, signed into law in 2021, was put in place to reform Nigeria's oil and gas sector. It was enacted to reform the governance, regulatory, and fiscal structure of the sector after nearly two decades of stalled petroleum reform efforts.
The law provides for the commercialisation of the NNPCL into a limited liability company, establishes new regulatory bodies for upstream and midstream/downstream operations, restructures revenue-sharing arrangements, and introduces host community development provisions.
