KEY POINTS
- The South-South Governors’ Forum (SSGF) has lauded President Bola Tinubu’s Executive Order mandating the direct remittance of all oil and gas revenues to the federation account.
- Forum Chairman Douye Diri stated the order eliminates “opaque deductions” and strips NNPCL of the 30% Frontier Exploration Fund to plug revenue leakages.
- Governors welcomed the President’s plan to review the Petroleum Industry Act (PIA), specifically calling for an increase in the host community share from 3% to 10%.
MAIN STORY
The South-South Governors’ Forum (SSGF) has described President Bola Tinubu’s Executive Order on oil revenue remittances as a historic and far-reaching move for the nation’s economy. The forum’s chairman and Governor of Bayelsa State, Douye Diri, stated on Wednesday that the region’s governors welcome the directive requiring direct remittance of all oil and gas revenues to the federation account.
Diri characterized the order as comprehensive and heart-warming, noting that it restores constitutional integrity to Nigeria’s petroleum sector after years of complex and opaque deduction structures.
According to Diri, the directive ensures that federal, state, and local governments will now receive their rightful entitlements. A key provision highlighted by the governors is the removal of the 30% Frontier Exploration Fund from the Nigerian National Petroleum Company Limited (NNPCL), which Diri claimed created large idle cash balances. He added that requiring operators under Production Sharing Contracts to remit Royalty, Tax, and Profit Oil directly would effectively plug revenue leakages and increase funding for critical sectors like infrastructure, healthcare, and education.
Furthermore, Diri expressed support for the President’s plan to review the Petroleum Industry Act (PIA). He argued that the current Act serves as a “ticking time bomb” because it excludes states and local councils from administering community entitlements. The South-South governors are specifically advocating for the restoration of the host communities’ share to 10%, up from the current 3%, and urging the Federal Government to involve sub-national authorities in managing community affairs to prevent potential crises.
WHAT’S BEING SAID
- “The directive raised hope after years of opaque and complex deduction structures in oil revenue management,” stated Douye Diri, Chairman of the SSGF.
- Diri emphasized the impact on NNPCL: “It will effectively strip the Nigerian National Petroleum Company Limited (NNPCL) of the nebulous 30 per cent Frontier Exploration Fund.”
- Regarding the PIA, he warned: “The PIA, as designed, cut off states and local councils to deal directly with communities… it is our submission that the reduction of oil communities’ share from 10 per cent to three per cent be revisited.”
WHAT’S NEXT
- State and local governments will begin monitoring the federation account for increased inflows following the elimination of NNPCL’s deductions.
- The Federal Government is expected to initiate a formal process to amend the Petroleum Industry Act (PIA) based on the President’s review plan.
- South-South governors plan to engage with host communities to harmonize their positions ahead of the proposed legislative reviews.
BOTTOM LINE
The Bottom Line is that the South-South Governors view the new Executive Order as a major step toward fiscal justice and transparency. By centralizing oil revenue remittances and opening the door for a PIA review, the governors believe the sub-national tiers of government will be better positioned to fund development and maintain stability in oil-producing regions.
 has described President Bola Tinubu’s Executive Order on oil revenue remittances as a historic and far-reaching move for the nation's economy. The forum's chairman and Governor of Bayelsa State, Douye Diri, stated on Wednesday that the region’s governors welcome the directive requiring direct remittance of all oil and gas revenues to the federation account.){kind=link}