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The Senate Committee on Finance has disclosed that President Bola Tinubu will soon transmit proposals to the National Assembly seeking amendments to certain provisions of the Petroleum Industry Act (PIA) to reflect Nigeria’s current economic realities.
Sani Musa (Niger East), the Chairman of the committee, made the disclosure on Thursday during an interactive session with the Economic Management Team, led by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.
Also in attendance were Atiku Bagudu, the Minister of Budget and Economic Planning; Shamseldeen Ogunjimi, the Accountant-General of the Federation; and Zacch Adedeji, the Chairman of the Nigeria Revenue Service, alongside heads of agencies under the committee’s oversight.
The session formed part of deliberations on proposals for the 2026 budget.
Speaking during the meeting, Musa referred to Tinubu’s recent executive order mandating the direct remittance of oil and gas revenues to the Federation Account, noting that the directive had triggered assumptions that government revenue would automatically increase.
“When the president signed the executive order, the assumption in Nigeria today is that more money will come to the government. We’re still operating regime.
“We’re not yet transitioned to where we want to be and that is why Mr President said he’s bringing the PIA for amendment,” he said.
He explained that projections and adjustments arising from the executive order would be integrated into the 2026 fiscal framework.
“Projections that we’ll do and the adjustment we’ll do now based on this directive of this order will also form part of the planning in the 2026 budget,” he added.
On Wednesday, President Tinubu signed an executive order directing that royalty oil, tax oil, profit oil, profit gas and other revenues due to the Federation under production-sharing, profit-sharing and risk-service contracts be paid directly into the Federation Account.
The order also scrapped the 30 per cent Frontier Exploration Fund established under the PIA and discontinued the 30 per cent management fee on profit oil and profit gas retained by the Nigerian National Petroleum Company Limited (NNPCL).
Anchored on Sections 5 and 44(3) of the 1999 Constitution (as amended), the Presidency said the move was aimed at safeguarding oil and gas revenues, curbing excessive deductions and restoring the constitutional entitlements of federal, state and local governments to the Federation Account.
However, the directive has drawn criticism from stakeholders in the oil and gas sector.
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) rejected the order, describing it as a dangerous precedent capable of undermining the PIA and eroding investor confidence.
Festus Osifo, PENGASSAN president at a press briefing, called for the immediate withdrawal of the directive, saying the association was troubled by the development.
The PIA, signed into law in 2021, is a comprehensive reform of Nigeria’s oil and gas sector.
It provides for the commercialisation of the NNPCL into a limited liability company, establishes new regulatory bodies for upstream and midstream/downstream operations, restructures revenue-sharing arrangements and introduces host community development provisions.
Beyond the proposed PIA amendment, the committee also used the session to demand changes to key fiscal and administrative systems.
It asked the Federal Government to revert to the old payment system that allowed Ministries, Departments and Agencies (MDAs) to pay contractors directly, instead of the current centralised system, which lawmakers said had left many contractors unpaid for projects executed in 2024 and even those ongoing in 2025.
The committee further called for the replacement of the envelope budgeting system with a priority or performance-based model, arguing that the incremental allocation approach had failed.
Putting the economic team on notice in his opening remarks, Musa said feedback from budget defence sessions showed that the impact of economic reforms was yet to be felt by ordinary Nigerians.
“Specifically, based on submissions made by heads of various agencies during the ongoing budget defence sessions, the Envelope system of budgeting has failed and needs to be replaced by priority based model.
“The incremental allocation model has outlived its usefulness. It promotes routine expenditure expansion rather than strategic prioritisation.
“Similarly, the centralized system of payment which has led to many contractors remaining unpaid for projects already executed, should be replaced with the old system which allows the various MDAs, pay contractors they gave job to,” he said.
He also stressed the need to restore strict adherence to the annual budget cycle.
“If, by December, we cannot assess ourselves realistically, then the system is failing. We must return to a disciplined budget cycle where one fiscal year ends before another begins,” he said.
In addition, the committee resolved to write Tinubu, urging him to sack Hussaini Magaji (SAN), the Registrar-General of the Corporate Affairs Commission (CAC), for persistently refusing to appear before it.
In their responses, members of the Economic Management Team assured the committee that the outlook for the proposed N58.472 trillion 2026 budget was positive in terms of implementation.
They clarified that the country’s current N152 trillion debt profile was not solely the result of fresh borrowing.
“Currently, government debt in Naira terms, is 152 trillion Naira. About 30 trillion Naira came from Ways and Means inherited by this government and N9 trillion incurred from exchange rate adjustment.
“So virtually half of that debt is made up of adjustments. It is not additional borrowing. Additional borrowing since 2023 is in the 20 trillion range.
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“Going forward is what matters most. Prioritization will start with the MDAs, bringing forward growth-enhancing projects. Then the Economic Management Team will review those projects, and finally, Mr. President will decide financing based on priorities, particularly for capital projects,” the minister said.
The session ended with both sides agreeing on the need for closer collaboration between the executive and the legislature to ensure better budget planning, implementation and revenue optimisation ahead of the 2026 fiscal year.
