Executive Order on oil revenue enforces constitutional provisions

The Presidency has defended Executive Order 9 (EO9), describing it as a constitutional instrument aimed at safeguarding public revenues rather than an attempt by the President to usurp the powers of the National Assembly.

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In a statement issued Monday and posted by President Bola Tinubu’s Special Adviser on Media and Public Communication, Sunday Dare, the government argued that criticisms suggesting that EO9 amounts to the President “making law” misrepresent both the 1999 Constitution (as amended) and the fiscal issues at stake.

“Commentary suggesting that Executive Order 9 (EO9) amounts to the President ‘making law’ misstates both the Constitution and the fiscal question at issue. EO9 does not create law; it enforces constitutional custody of Federation revenues,” the statement noted.

The government’s explanation comes amid widespread criticism of the executive order signed by Mr Tinubu last week on oil and gas revenue remittances in the country.

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Mr Tinubu signed the 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.

The order also scrapped the 30 per cent Frontier Exploration Fund established under the Petroleum Industry Act (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.

Presidential spokesperson Bayo Onanuga had earlier stated that under the current PIA framework, NNPCL retains 30 per cent of oil and gas profit as a management fee and another 30 per cent for frontier exploration, significantly reducing net inflows to the federation account.

While many experts have applauded the president’s order, the move has also been widely criticised by some analysts as a contravention of the provisions of the PIA endorsed by Mr Tinubu’s predecessor, the late President Muhammadu Buhari.

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) last Thursday rejected President Bola Tinubu’s newly signed executive order mandating the direct remittance of oil and gas revenues to the Federation Account.

The union described the directive as a dangerous precedent that could undermine the PIA and erode investor confidence in the sector.

Constitution

The government maintained that the order merely enforces existing constitutional provisions governing the custody and management of federation revenues.

Citing Section 80(1) of the constitution, the presidency noted that “all revenues or other moneys raised or received by the Federation shall be paid into and form one Consolidated Revenue Fund of the Federation,” stressing that public funds cannot lawfully be retained or applied outside constitutionally recognised accounts.

It also referenced Section 162, which requires revenues accruing to the federation to be paid into the federation’s account for distribution in line with constitutional allocation principles.

According to the statement, EO9 operationalises these provisions within the oil and gas sector by directing the direct remittance of petroleum revenues — including royalties, taxes, profit oil and gas, penalties, and related receipts — into constitutionally recognised accounts.

READ ALSO: PENGASSAN seeks withdrawal of Tinubu’s Executive Order on oil revenues

It said the order also seeks to strengthen reconciliation processes and enhance transparency across revenue collection, custody, and reporting systems.

The presidency further argued that the directive does not intrude into legislative competence, noting that Section 60(1) preserves the procedural autonomy of the National Assembly. It said EO9 neither amends the Petroleum Industry Act nor repeals any statute, but was issued pursuant to Section 5 of the Constitution, which vests the President with executive powers to ensure the faithful execution of the Constitution and existing laws.

It added that the courts should resolve any dispute regarding the validity of the order. “Pending any judicial pronouncement, the Executive is duty-bound to protect Federation revenues, uphold constitutional supremacy, and strengthen fiscal integrity for FAAC distributions, budget credibility and macroeconomic stability,” the statement said.