President Bola Ahmed Tinubu is set to initiate fresh amendments to the Petroleum Industry Act (PIA) following his recent executive order on oil and gas revenue remittances, a move that signals another significant shift in Nigeria’s energy and fiscal governance framework.
The development was disclosed by the Senate Committee on Finance during an interactive session with members of the Economic Management Team, as lawmakers intensified scrutiny of revenue projections ahead of the 2026 budget cycle.
Tinubu to amend PIA after revenue Executive Order
Chairman of the Senate Committee on Finance, Sani Musa, confirmed that the President would soon transmit proposed amendments to the National Assembly.
According to him, the adjustments are intended to align the PIA with prevailing economic conditions and the implications of the newly signed executive order mandating direct remittance of oil and gas revenues to the Federation Account.
The executive order, signed earlier this week, directs that royalty oil, tax oil, profit oil, profit gas and related proceeds from production-sharing and risk-service contracts be paid directly into the Federation Account.
The directive also eliminates the 30 per cent Frontier Exploration Fund provided under the PIA and discontinues the 30 per cent management fee previously retained by the Nigerian National Petroleum Company Limited on profit oil and gas.
Anchored on constitutional provisions, the Presidency described the order as a corrective mechanism aimed at curbing revenue leakages, reducing excessive deductions and restoring statutory allocations to federal, state and local governments.
However, as Tinubu moves to amend PIA provisions, the policy shift has triggered debate within the oil and gas sector, with labour unions and industry stakeholders expressing concern about regulatory stability and investor confidence.
Senate links amendment to 2026 fiscal framework
During the session with the Economic Management Team—led by Minister of Finance and Coordinating Minister of the Economy, Wale Edun—lawmakers underscored that projected gains from the executive order would be incorporated into the 2026 budget planning process.
Senator Musa noted that while expectations are high that the executive order will boost government revenue, the country is still operating under transitional fiscal conditions.
According to him, amendments to the PIA will provide legal clarity and ensure that revenue optimisation measures are embedded within the statutory framework rather than relying solely on executive directives.
The proposed amendments come at a time when Nigeria’s public finances face mounting pressure from debt servicing obligations and currency adjustments. Members of the Economic Management Team clarified that the country’s N152 trillion debt profile includes legacy components such as inherited Ways and Means advances and exchange rate revaluations, rather than solely fresh borrowings.
Industry backlash grows
While lawmakers welcomed the executive order as a revenue-enhancing tool, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) voiced strong reservations.
Its president, Festus Osifo, described the directive as a potential threat to the integrity of the PIA, warning that abrupt changes could unsettle investors who rely on predictable regulatory structures.
According to the association, any substantial alteration to revenue-sharing mechanisms should be subjected to legislative amendment rather than executive fiat.
The PIA, signed into law in 2021, was designed as a comprehensive overhaul of Nigeria’s petroleum industry. It commercialised the national oil company, established separate upstream and midstream/downstream regulators, and introduced host community development frameworks aimed at reducing conflicts in oil-producing areas.
Analysts argue that while Tinubu’s decision to amend PIA provisions may enhance fiscal transparency, the government must strike a balance between revenue recovery and maintaining the reform credibility achieved by the landmark legislation.
Budget reform demands intensify
Beyond the oil sector, the Senate Committee on Finance used the meeting to demand broader fiscal reforms. Lawmakers criticised the envelope budgeting model, describing it as outdated and ineffective in promoting strategic prioritisation.
They advocated a shift to a performance-based budgeting framework that aligns spending with measurable economic outcomes. The committee also called for a return to the previous contractor payment system, arguing that the current centralised structure has delayed payments for projects executed in 2024 and ongoing in 2025.
Senator Musa stressed the importance of restoring discipline to the annual budget cycle, insisting that each fiscal year must conclude before another begins to improve accountability and performance assessment.
Revenue optimisation versus policy certainty
The decision by Tinubu to amend PIA provisions follows growing concerns about revenue leakages and inefficiencies within the oil and gas value chain. By directing that all eligible revenues flow directly into the Federation Account, the administration aims to strengthen federal allocations and improve fiscal transparency.
However, market observers caution that continuous policy shifts may heighten investor risk perception, particularly in a sector that requires long-term capital commitments.
Energy economists suggest that legislative amendments, rather than executive orders alone, could provide stronger legal certainty and mitigate concerns raised by stakeholders. If implemented through proper legislative channels, the amendments may reinforce Nigeria’s fiscal consolidation strategy while preserving the integrity of sector reforms.
As Tinubu prepares to amend PIA provisions formally, attention will turn to the National Assembly’s deliberations and the scope of proposed changes. Lawmakers are expected to scrutinise the fiscal projections tied to the executive order and assess their sustainability within the broader 2026 budget outlook.
The unfolding debate underscores a central tension in Nigeria’s economic reform agenda: the urgency to maximise revenue amid fiscal constraints versus the need to maintain regulatory stability in a capital-intensive industry.
For now, Tinubu’s move to amend PIA after the revenue executive order signals a new phase in the administration’s drive to recalibrate oil sector governance, with significant implications for federal allocations, investor confidence, and the 2026 fiscal roadmap.
