The controversial Executive Order No. 9 of 2026 which essentially pulls back investment and operating capitals reserved for strategic growth programs of the Nigerian National Petroleum Company (NNPC) Limited does not just nullify provisions of the Petroleum Industry Act (PIA), it also prioritizes urgent disposable cash over sustainable industry growth.

Professor Emeritus and erudite industry analyst, Prof Wunmi Iledare, declared in a position note that the dismantled Frontier Exploration Fund (FEF) which was created under the PIA and funded by 30percent of NNPC’s profit oil and gas from production sharing contracts (PSCs), was designed to support long-term petroleum reserves growth through frontier basin exploration.

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The Executive Order suspends that allocation and redirects the funds to the Federation Account.

“While this may enhance short-term FAAC inflows,” Prof Iledare argues, it raises a strategic indication that government is prioritizing immediate distributable revenue over long-term reserves sustainability.

He also noted that the suspension of NNPC’s 30 percent management fee upends legislative acts and policies that support commercial autonomy of the national oil company.

Prof Iledare argues that suspension of NNPC’s management fee ought to be viewed within the context of commercial reform, pointing out that the PIA commercialized NNPCL to function as a limited liability company.

He stated that commercial entities require predictable compensation structures and would require structured legislative or policy review to alter the provision. He added that institutional consistency is essential if NNPC’s commercial autonomy is to remain credible.

He also noted that government has not achieved any significant increase in income by pulling back operational funds into distributable cash for sharing among the three tiers of government.

Prof Iledare noted that “while revenue enhancement is a legitimate policy objective, we must distinguish between revenue re-routing and revenue expansion. Redirecting existing fiscal streams does not automatically increase production, reduce operating costs, improve security, or attract new investment. Sustainable petroleum revenue depends fundamentally on production growth and regulatory stability.”

According to him, the Executive Order further also touches on governance dimension given that the PIA deliberately distributed policy, regulatory and operational roles the ministry, NUPRC and NMDPRA as well as NNPCL respectively.

He pointed out that where executive coordination mechanisms, including the role of the Special Adviser on Energy and related committees, overlap operational or regulatory domains, “the issue becomes one of institutional design.”

He noted that coordination strengthens reform; over-centralization risks blurring statutory boundaries.

“The strength of the PIA lies in clarity of roles and legal hierarchy. Any reform initiative should reinforce that architecture. In petroleum fiscal governance, durability, coherence, and production optimization matter more than speed,” Prof Iledare declared.

Oracle Intelligence reports that the Nigerian senior oil workers union, PENGASSAN, had immediately kicked against the Executive Order 9, calling on President Bola Tinubu to immediately withdraw the directive on the grounds that it erased provisions of the PIA.