Stakeholders in oil and gas industry have commended President Bola Tinubu’s Executive Order on oil and gas remittances, describing it as a decisive fiscal reform.
In separate interviews in Lagos on Thursday, February 19, 2026, the stakeholders, however, cautioned that its lasting impact would depend on constitutional alignment and legislative clarity.
On Feb. 18, President Bola Tinubu signed an Executive Order directing the restructuring of oil and gas revenue remittances to the Federation Account.
Experts said that the decision signaled one of the most significant fiscal interventions since the enactment of the Petroleum Industry Act (PIA).
Prof. Wumi Iledare, Professor Emeritus of Petroleum Economics and Policy Research at the Louisiana State University Centre for Energy Studies, described the move as a legitimate and timely public finance reform.
“Strengthening remittance accountability and improving visibility of petroleum inflows are critical national priorities.
“In a period marked by budgetary strain and debt sustainability concerns, safeguarding public revenues and curbing inefficiencies are not optional, they are imperative,” he said.
Iledare said that the Executive Order seeks to reduce discretionary retention of oil revenues and improve statutory remittances to the three tiers of government.
The don said that direct remittance of royalty from oil, oil tax and profit oil into the Federation Account could significantly enhance transparency and reduce intermediation bottlenecks.
According to Iledare, the reform has the potential to reinforce fiscal discipline, but warned that some aspects intersect directly with statutory provisions of the PIA.
“Key fiscal instruments – including the Frontier Exploration Fund, the Midstream and Downstream Gas Infrastructure Fund, and Production Sharing Contract (PSC) frameworks are creations of the National Assembly,” the petroleum expert said.
He said that the substantive alterations may require legislative amendments to ensure constitutional coherence.
“While Section 5 of the Constitution empowers the President to implement and enforce laws, changes to statutory fiscal frameworks ideally require legislative action to guarantee institutional certainty,” Iledare said.
He stressed the technical necessity of distinguishing between contractual revenue allocations embedded in PSC agreements, retained earnings of NNPC Limited, and statutory earmarked funds established under the PIA.
“Clarity is essential to avoid conflicting contractual entitlements with discretionary fiscal practices,” he said.
Beyond fiscal adjustments, Iledare raised a broader governance question. Is the Executive Order a prelude to an amendment of the PIA?
“Recent board appointments to regulatory institutions under the Act were widely welcomed, yet observers note limited visible institutional movement since then.
“If reforms focus narrowly on revenue enhancement without strengthening governance effectiveness, structural weaknesses in the sector may persist.
“Sustainable reform requires both fiscal efficiency and institutional credibility. Presidential Executive Orders must reinforce and not dilute the Petroleum Industry Act,” he said.
Also, Dr Ayodele Oni, Partner and Chair of the Energy & Natural Resources Practice Group at Bloomfield Law, also described the Order as a major fiscal reform step aimed at improving transparency and optimising petroleum revenue flows to the Federation.
He noted that Sections 80 and 162 of the Nigeria’s Constitution support the principle that federation revenues be paid into the designated Federation Account.
However, he framed the central debate as procedural.
Oni questioned should such changes be implemented solely through executive action, or through amendments to the PIA by the National Assembly?
“There are two perspectives – One suggests certain PIA provisions may conflict with the constitution, meaning the Executive Order realigns processes accordingly.
“The other maintains that if provisions are unconstitutional, it is for the judiciary to nullify them and for the legislature to enact corrective measures.
Like Iledare, Oni underscored that statutory constructs such as the Frontier Exploration Fund and existing PSC frameworks, which he said were established by parliamentary law and therefore require legislative backing for substantive modification.
He highlighted the longstanding institutional tension arising from NNPC Limited’s dual role as commercial operator and concessionaire, a structural complexity within the post-PIA framework.
Oni also said that the reforms designed to strengthen NNPC’s commercial identity, must be anchored in clear legal principles and predictable governance mechanisms.
“In the short term, the Order may affect NNPC’s revenue streams and serve as incentive to greater operational efficiency, but long-term success depends on constitutional and legislative alignment,” he said.
According to Oni, Nigeria’s petroleum sector remains central to national economic stability, accounting for the bulk of foreign exchange earnings and a substantial share of public revenues.
By Yunus Yusuf
