Oil Workers Raise Fresh Concerns Over Direct Oil Revenue Remittance Order

Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has raised fresh concerns over President Bola Tinubu’s directive mandating the direct remittance of oil and gas revenues to the federation account.

The oil workers warned that the move could undermine the Petroleum Industry Act (PIA) and destabilise the sector.

PENGASSAN president,Festus Osifo, spoke at the National Executive Council (NEC) meeting in Abuja yesterday, where he said the executive order posed operational and welfare risks, particularly to workers of the Nigerian National Petroleum Company Limited (NNPCL).

The order as signed by President Bola Tinubu recently, effectively removed NNPCL’s discretion over oil and gas revenue remittances, a development the government defended as aiming at strengthening transparency and boosting federal allocations to states and local governments.

However, Osifo said while the union supports accountability and transparency in the oil and gas industry, the approach adopted by government could create unintended consequences.

According to him, the directive, which transfers the remittance of 30 per cent profit on oil directly to the Federation Account Allocation Committee (FAAC), effectively removes NNPCL’s management fee, from which staff salaries and operational costs are paid.

He explained that oil profit is calculated after royalties, taxes and cost recovery are deducted, leaving a residual from which NNPCL receives about 30 per cent as management fee amounting to roughly 1.5 to 2.5 per cent of total revenue.

Osifo warned that removing the management fee without a clear replacement framework could affect the remuneration of hundreds of PENGASSAN members engaged in managing Production Sharing Contracts (PSCs) and interfacing with international oil companies.

Beyond labour implications, he said the order could affect industry stability and Nigeria’s foreign exchange earnings, with potential knock-on effects on the naira and inflation.

The PENGASSAN leader, however, said its members are currently engaging government through dialogue, including meetings with the Presidential Implementation Committee.

He said, “We have started engaging government. We had engagement on Sunday. We had engagement yesterday. We are going to further the engagement on Wednesday by meeting the Presidential Implementation Committee of the executive order to raise our concerns.

For us, there is no hidden agenda. We don’t politicise issues. We purely look at how those issues are going to affect first our members, secondly the industry, and lastly Nigerians.

“The main crux of it today is how this will impact on our members. The management fee is what is used to cater for the salary and allowances of our members who are managing these PLCs and interfacing with Shell, TotalEnergies and ExxonMobil.

Nigeria as a country, we want stability in the industry. If there is no stability, it will affect our foreign exchange earnings, and when that happens, it will feed into the value of the naira and inflation. That is why we will continue engagement so that our members and the industry are protected.”