PENGASSAN Warns Tinubu's Oil Revenue Order Could Trigger Massive Job Losses
The Petroleum and Natural Gas Senior Staff Association of Nigeria has issued a stark warning about potential job losses in the country's vital oil and gas industry. This caution comes in response to a new Executive Order recently signed by President Bola Tinubu that fundamentally restructures how oil revenues are remitted to government accounts.
Executive Order Restructures Revenue Flow
President Tinubu's directive mandates the direct transfer of royalty oil, tax oil, and profit oil directly to the Federation Account. This significant policy shift effectively eliminates the thirty percent management fee that the Nigerian National Petroleum Company Limited previously retained on profits. The federal government has defended this measure as necessary for improving transparency and strengthening statutory allocations to federal, state, and local governments.
Presidential spokesman Bayo Onanuga explained that the order aims to reduce discretionary retention of funds while enhancing accountability in managing Nigeria's oil revenues. The government has established an inter-ministerial implementation committee to oversee compliance and ensure effective execution of the directive across the sector.
Union Raises Alarm Over Employment Consequences
Despite the government's stated transparency objectives, PENGASSAN President Festus Osifo has expressed serious concerns about unintended consequences for employment stability. Speaking in Lagos, Osifo warned that the restructuring could destabilize operations within the sector, particularly at NNPC Limited, potentially leading to significant job cuts if not carefully implemented.
"If not properly managed, this could lead to job losses that will affect thousands of families," Osifo stated emphatically. He acknowledged the government's intention to strengthen fiscal accountability but stressed that workforce stability must remain a crucial consideration in any policy reform affecting Nigeria's most strategic economic sector.
Potential Impact on Investor Confidence
The oil and gas sector remains central to Nigeria's economy, contributing a major share of foreign exchange earnings and government revenue. Osifo cautioned against reforms that could weaken investor confidence or disrupt operational stability, noting that sudden policy changes without broad stakeholder engagement could unsettle investors in an intensely competitive global investment climate.
Osifo referenced the Petroleum Industry Act enacted in August 2021, which was designed through extensive consultations to provide regulatory clarity, boost fiscal transparency, and restore investor confidence after years of declining investment. He warned that abrupt policy shifts could undermine these carefully developed frameworks.
Calls for Urgent Stakeholder Consultations
PENGASSAN has called for immediate consultations among government officials, regulators, operators, and labor unions to ensure that implementation of the Executive Order does not negatively impact employment or investor confidence. The union maintains that dialogue will be crucial to balancing fiscal reform objectives with the need to safeguard jobs across the oil and gas value chain.
Osifo urged policymakers to engage labor leaders before taking further steps, emphasizing that reforms should ultimately support growth, efficiency, and national development. As the new revenue framework begins to take effect, protecting jobs from upstream exploration to downstream services should remain a national priority according to the union's position.
The federal government has justified the oil revenue restructuring by arguing that dual deductions significantly reduced revenue available to the three tiers of government under the Petroleum Industry Act. However, PENGASSAN maintains that any policy affecting Nigeria's primary economic engine must carefully consider employment implications alongside transparency objectives.
