President Bola Tinubu's Executive Order, which prohibited revenue deductions by the Nigerian National Petroleum Company Limited and other agencies, has been upheld by the presidency. It stated that the Nigerian Constitution is not superseded by the Petroleum Industry Act and that it is in violation of it. The Nigerian Petroleum and Natural Gas Senior Staff Association protested on Friday at the NNPC Towers in Abuja, claiming that the President's income withholding order violated the PIA.
In its protest, PENGASSAN charged that the President was compromising NNPCL's operational autonomy and warned to take additional measures if the government did not revoke the order.
The union contended that the direction would severely impair the business's capacity to finance operations and fulfill its legal commitments, such as making contributions to the Frontier Exploration Fund, which is essential for 2026 hydrocarbon exploration.
In response to questions, the Petroleum and Natural Gas Senior Staff Association of Nigeria's critique of the directive demonstrated a lack of understanding of constitutional supremacy over ordinary legislation, according to Bayo Onanuga, Special Adviser to the President on Information and Strategy.
"PENGASSAN is only concentrating on PIA. The Nigerian Constitution, which PIA violated by permitting the deductions that the President has since halted, serves as the foundation for the President's decision. "Our constitution is not superior to PIA," Onanuga said.
Without researching the constitutional clauses supporting the instruction, the presidential spokesperson maintained that the union had a "knee-jerk reaction."
He stated, "PENGASSAN should have read the constitution before making its snap decision."
Onanuga clarified that Section 5 of the 1999 Constitution, which gives the President executive powers over the Federation, including upholding the Constitution and carrying out federal laws, is where the Executive Order gets its authority.
According to him, the instruction is also based on Section 44(3) of the Constitution, which gives the Government of the Federation ownership, control, and derivative rights over all minerals, mineral oils, and natural gas in Nigeria.
The executive order, according to the presidential adviser, aims to restore the federal, state, and local governments' constitutional revenue entitlements that were "taken away in 2021 by the Petroleum Industry Act."
According to Onanuga, "the PIA established legal and structural avenues through which significant Federation revenues are lost through deductions, various charges, and fees."
According to the Presidency, the order is required to stop income leaks and make sure that money that is legally owed to all levels of government isn't taken away through statutory deductions.
The late former President Muhammadu Buhari signed the PIA into law in August 2021, giving NNPCL considerable operational and financial autonomy. This included the ability to keep profits for internal use before sending them to the Federation Account.
NNPCL is expressly exempt from the Fiscal Responsibility Act under Section 54 of the Act, which permits it to conduct business as usual without being subject to certain financial requirements.