PENGASSAN Faults Tinubu’s Executive Order on Oil Sector, Accuses Fuel Dealers of Exploiting Nigerians
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has faulted President Bola Tinubu’s newly signed Executive Order aimed at promoting offshore oil and gas production, arguing that it could weaken enforcement of the Nigerian Content Act and fails to address core issues plaguing the upstream sector.
Titled the “Upstream Petroleum Operations Cost Efficiency Incentives Order (2025),” the policy introduces tax incentives for upstream operators who achieve industry benchmarked cost reductions. However, PENGASSAN raised concerns about a key provision granting a 20 percent tax credit to oil producers, warning that such incentives may not lead to actual cost savings unless Nigeria’s pervasive security challenges are resolved.
At a press conference in Abuja, PENGASSAN President Festus Osifo emphasized that insecurity remains a major driver of high production costs in the upstream sector. He explained that oil and gas companies spend heavily on securing installations across land, shallow, and deep offshore environments — a burden companies in other countries do not bear. According to him, this excessive security expenditure is among the reasons international oil firms are exiting Nigeria.
Osifo stressed that unless foundational problems like insecurity are urgently addressed, cost-reduction efforts would be ineffective. He noted that government, not private operators, should shoulder the responsibility for securing oil infrastructure. Citing an example, he said offshore installations often require multiple security vessels manned by naval personnel, fueled and paid for daily by the companies themselves.
PENGASSAN also objected to a clause in the Executive Order suggesting that the Nigerian Content Development and Monitoring Board (NCDMB) may adopt a more flexible enforcement approach. Osifo insisted that an Executive Order cannot override an existing law, emphasizing that the NCDMB Act must be fully respected and implemented.
Turning to the downstream petroleum sector, Osifo accused marketers and fuel dealers of exploiting Nigerians by failing to reduce pump prices in response to falling global crude oil prices. He lamented that despite a recent dip in oil prices to around $65 per barrel, there was no corresponding drop in petrol prices, as should be the case under a deregulated market.
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He blamed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for neglecting its role in enforcing market-driven pricing and protecting consumers from exploitation. Osifo also urged regulators to ensure that fuel prices are not artificially inflated in anticipation of possible global price hikes due to the Israel-Iran conflict.
On a related note, Osifo disclosed that Sterling Oil Company had admitted to violating the Nigerian Content law in its operations and signed an undertaking to rectify the situation following a Memorandum of Understanding with PENGASSAN.
PENGASSAN concluded its position by reaffirming its call for deeper reforms that prioritize national security, enforce existing laws, and protect ordinary Nigerians from profiteering in the oil and gas sector.
