Abuja – The South-South Governors Forum (SSGF) has described President Bola Tinubu’s Executive Order mandating the direct remittance of all oil and gas revenues to the Federation Account as a historic and landmark decision. The SSGF Chairman and Governor of Bayelsa State, Senator Douye Diri, in a statement on Wednesday, said the region’s governors welcomed the decision as a critical shift towards the restoration of constitutional integrity in Nigeria’s petroleum sector.
The Forum said the Executive Order was comprehensive, unambiguous and heartwarming, and that it raised hope that after many years of opaque and complex deduction structures, the federal, state, and local governments would begin to receive their rightful entitlements from the Federation Account.
“The South-South region, particularly, welcomes the key provisions of the Executive Order, which would eliminate opaque deductions and effectively strip the Nigerian National Petroleum Company Limited (NNPCL) of the nebulous 30 percent Frontier Exploration Fund. This fund often led to large idle cash balances,” the statement reads.
“Mandating all operators and contractors under Production Sharing Contracts to remit Royalty Oil, Tax Oil, and Profit Oil directly to the Federation Account will significantly plug revenue leakages. This decision is a positive step towards fiscal justice for sub-nationals, particularly the oil-producing states, just as it would potentially increase available funds for critical infrastructure, healthcare, education and other sectors across the three tiers of government,” it added.
The Forum also expressed delight with Mr President’s move to undertake a comprehensive review of the Petroleum Industry Act (PIA), saying it is an affirmation that he is a leader who listens and places the interest of the people above other considerations.
“It is our submission that the percentage due to oil communities, which was reduced from 10 percent, as proposed by the majority of states in the region, to 3 percent, should be revisited and reviewed. We also urge the Federal Government to immediately review the aspect where states and local governments were excluded from administering what is due to the communities. The states and councils are closer to the communities, and it was wrong to have excluded them from the administration of these communities. The current Act is a recipe for a crisis, and we urge Mr President to review it,” the statement said.
