ABUJA — A constitutional and operational crisis is brewing within Nigeria’s oil and gas regulatory framework following a new Executive Order from President Bola Tinubu. The directive, which mandates the immediate reallocation of all oil and gas revenues—including royalties and internally generated revenue (IGR)—directly to the Federation Account, has left agencies like the NUPRC and NNPC Ltd in a state of high uncertainty.
The move effectively halts the “retention” model, where agencies kept a percentage of collections to fund their own operations, raising a fundamental question: Can an Executive Order override the Petroleum Industry Act (PIA)?
The Statutory Tug-of-War: PIA vs. Executive Order
At the heart of the friction is Section 12 of the PIA 2021. The Act was specifically designed to grant the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) financial autonomy to ensure it could remain independent of political interference and bureaucratic delays.
The Funding Gap:
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The 4% Rule: In 2025, the NUPRC generated approximately ₦322.8 billion from its statutory “4% cost of collection.” This fund covers field inspections, security logistics, and technical monitoring.
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Competitive Salaries: To prevent brain drain to International Oil Companies (IOCs), the PIA mandates that NUPRC staff be paid at private-sector-equivalent rates. In 2024, the commission paid ₦88 billion in salaries and allowances.
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The Risk: Senior officials warn that if the NUPRC is forced to rely on conventional budgetary approvals from the National Assembly and the Ministry of Finance, its “operational independence” will be compromised by political pressure and slow capital releases.
Threat to the 3 Million BPD Goal
Industry experts warn that the funding vacuum created by this order could derail Nigeria’s ambitious energy targets, specifically the goal of reaching 3 million barrels per day (bpd) by 2030.
Impact Areas:
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Frontier Exploration: Ambiguity now surrounds the funding for Frontier Exploration Services, which is vital for increasing Nigeria’s Reserve Replacement Ratio.
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Infrastructure Midstream: The Midstream and Downstream Gas Infrastructure Fund—designed to attract $12 billion in annual investment—is now facing a “financing framework” crisis.
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Regulatory Paralysis: Without immediate access to funds for field inspections and enforcement, the ability to oversee a highly technical and sensitive industry could weaken significantly.
Stakeholder Concerns at a Glance
| Agency / Fund | Primary Concern | Statutory Source (PIA) |
| NUPRC | Operational paralysis & inability to pay competitive salaries. | 4% Cost of Collection |
| NNPC Ltd | Uncertainty over joint venture funding and revenue retention. | Retention for cost of production |
| Gas Infrastructure Fund | Delays in midstream projects and investor confidence. | Targeted gas revenue levies |
| Frontier Services | Stagnation of exploration in new inland basins. | 30% of NNPC profit oil/gas |
