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Executive Order 9 and its legal crisis 11 Mar 2026

On 13 February 2026, President Bola Ahmed Tinubu signed Executive Order No. 9, formally titled the Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity, 2026. The order directs that all petroleum revenues due to the Federation – including royalties, taxes, profit oil, profit gas, and gas flare penalties – be remitted directly to the Federation Account, eliminating various deductions and retentions previously authorised under the Petroleum Industry Act (PIA) 2021. 

Within days, the directive sparked intense debate across legal, economic, and industry circles, with stakeholders split between those who view it as a necessary corrective to constitutional violations and those who see it as executive overreach undermining legislative authority and investor confidence.

This controversy raises fundamental questions about Nigeria's constitutional architecture, the limits of presidential power, and the delicate balance between fiscal discipline and sectoral stability. At its heart lies a tension familiar to students of Nigerian public law: what happens when constitutional provisions appear to conflict with statutory frameworks enacted by the National Assembly? And can the President, through executive action, resolve that conflict without legislative amendment?

The Presidency's defence rests primarily on Sections 80 and 162 of the 1999 Constitution (as amended). Section 80(1) states unequivocally that all revenues raised or received by the Federation (not being revenues or other moneys payable under the Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated Revenue Fund of the Federation. Section 162 complements this requirement by mandating that revenues accruing to the Federation be paid into the Federation Account for distribution among the three tiers of government, according to constitutional allocation principles.

These provisions reflect a fundamental principle of fiscal federalism: revenues belong to the Federation as a whole, not to individual agencies or parastatals. The Federation Account serves as the constitutional mechanism for ensuring transparency, preventing unilateral diversion of public funds, and guaranteeing that all tiers of government receive their constitutionally prescribed shares. 

The constitutional logic is straightforward. Oil and gas revenues generated from resources vested in the Federation by Section 44(3) of the Constitution belong to all Nigerians, represented through their federal, state, and local governments. These revenues should therefore be deposited into the Federation Account, where they are subject to constitutional allocation formulas, legislative appropriation, and public oversight. Any retention or deduction before Federation Account remittance, unless explicitly authorised by the Constitution itself, violates this fundamental principle.

This constitutional mandate predates the PIA and indeed predates Nigeria's current democratic dispensation. The requirement that Federation revenues flow through the Federation Account has been a consistent feature of Nigerian constitutional design, reflecting hard-won lessons about fiscal transparency and accountability. It represents, in essence, a constitutional commitment to preventing the fragmentation of public revenues into opaque, unaccountable streams controlled by individual agencies.

The PIA 2021, however, created a different fiscal architecture. After decades of false starts and political stalemate, the PIA was enacted with the stated objectives of fostering transparency, attracting investment, promoting competition, and ensuring optimal value for Nigeria's petroleum resources. To achieve these goals, the Act established new institutional structures, including the transformation of the Nigerian National Petroleum Corporation into the Nigerian National Petroleum Company Limited (NNPC Ltd.), operating as a commercial entity governed by the Companies and Allied Matters Act.

Central to the PIA's fiscal framework were several provisions that authorised deductions and retentions from petroleum revenues before remittance to the Federation Account. Section 9 established the Frontier Exploration Fund, into which 30 per cent of NNPC Ltd.'s profit oil and profit gas, as in production-sharing, profit-sharing, and risk-service contracts, would be allocated. Section 64 authorised NNPC Ltd. to deduct a 30 per cent management fee from profit oil and profit gas payable to the Federation. Section 52 created the Midstream and Downstream Gas Infrastructure Fund, into which gas flare penalties would be paid.

These provisions were not accidental oversights. They reflected deliberate policy choices rooted in specific rationales. The Frontier Exploration Fund was designed to provide predictable, ring-fenced financing for exploration in commercially marginal basins – particularly in northern Nigeria – where private capital would not venture without government support. Such exploration is capital-intensive, high-risk, and essential for long-term reserves replacement. By earmarking 30 per cent of profit oil/gas for this purpose, the PIA sought to insulate frontier exploration from the annual budget process.

Similarly, the 30 per cent management fee was intended to enable NNPC Ltd. to operate as a genuine commercial entity with financial autonomy, able to make investment decisions, maintain assets, and compete with international oil companies without requiring annual budgetary allocations or ministerial micromanagement. 

The Midstream and Downstream Gas Infrastructure Fund similarly reflected a policy judgment: that gas flare penalties, levied on operators who burn associated gas wastefully, should be dedicated to developing gas infrastructure rather than flowing into general revenues. This was intended to create a self-reinforcing mechanism where penalties for environmental harm funded solutions to the infrastructure deficits that often contribute to flaring in the first place.

Executive Order 9 brings these two frameworks into direct collision. The President's position, articulated through the order and subsequent defences, is that the PIA's deduction and retention mechanisms violate Sections 80 and 162 of the Constitution. By allowing NNPC Ltd. and other entities to retain revenues before remitting them to the Federation Account, the PIA effectively diverts funds that constitutionally belong to the Federation.

From this perspective, the executive order does not create new law or override valid statutory provisions. Rather, it is directing executive agencies to comply with constitutional requirements that supersede any conflicting statutory provisions. The order does not purport to amend or repeal the PIA; it simply instructs agencies on how to administer petroleum revenues in a manner the President considers consistent with constitutional obligations. As the Presidency has emphasised, if the National Assembly believes the PIA validly authorises the challenged retentions, it remains free to defend that position in court.

Critics of the order, however, advance equally compelling constitutional arguments. They assert that the President lacks the authority to override or set aside an Act of the National Assembly through an executive instrument. Section 4 of the Constitution vests legislative power in the National Assembly, and Section 1(3) provides that any law inconsistent with the Constitution is void to the extent of that inconsistency. But critically, only the judiciary, not the executive, has the constitutional power to declare a law unconstitutional.

This principle of separation of powers is foundational. If the President believes a statute violates the Constitution, his remedy is to seek a judicial declaration to that effect, not to suspend the statute’s operation through executive fiat unilaterally. To allow otherwise would grant the President a de facto veto power over legislation, exercisable not through the constitutional process, but through the simpler mechanism of issuing executive orders declaring statutes constitutionally non-compliant.

Moreover, critics note that Section 80(1) itself recognises exceptions for revenues “not being revenues or other moneys payable under the Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose”. The PIA is precisely such an Act, duly passed by the National Assembly and assented to by the President. If the Act creates specific funds and authorises particular allocations, it does so pursuant to the exception clause in Section 80(1) itself. The constitutional requirement for remittance to the Federation Account is therefore not absolute but subject to lawful legislative modification.

The tension at the heart of Executive Order 9 is not new to Nigerian jurisprudence. Our courts have long grappled with questions of constitutional supremacy, statutory interpretation, and the limits of executive action. Several principles established in prior cases offer guidance, though they do not definitively resolve the current controversy.

First, constitutional supremacy is firmly established. Section 1(1) of the Constitution declares that the Constitution is supreme and that any law inconsistent with its provisions is void to the extent of the inconsistency. This means that where a genuine conflict exists between constitutional provisions and statutory provisions, the Constitution prevails. The challenge, however, lies in determining whether such a conflict actually exists.

Second, courts generally presume that statutes are constitutional. The principle of presumption of constitutionality holds that Acts of the National Assembly are presumed valid unless and until declared otherwise by a court of competent jurisdiction. This presumption reflects respect for the legislative branch and recognises that elected representatives, having taken oaths to uphold the Constitution, are presumed to legislate within constitutional bounds. 

Third, executive orders cannot amend statutes. This principle, emphasised by critics of Executive Order 9, reflects the separation of powers doctrine. The President's power under Section 5 of the Constitution to execute and maintain the Constitution and laws does not extend to rewriting or suspending those laws. An executive order may direct how agencies implement statutes, clarify ambiguities, or fill gaps where statutes grant discretion. But it cannot override clear statutory provisions or suspend statutory obligations.

The question, then, is whether Executive Order 9 falls on the permissible or impermissible side of this line. Does it merely direct agencies to comply with constitutional obligations, leaving the PIA’s text unchanged but non-operative insofar as it conflicts with the Constitution? Or does it effectively amend the PIA by suspending statutory provisions that remain valid unless and until judicially invalidated? The answer likely depends on one’s view of whether the PIA's retention mechanisms genuinely violate Sections 80 and 162, a question that may ultimately require judicial determination.

Instead of Executive Order 9's approach, alternative paths could achieve similar objectives while preserving statutory stability. Legislative amendment of the PIA would provide the clearest resolution, allowing the National Assembly to revise the fiscal architecture after stakeholder consultation and expert input. While more time-consuming than an executive order, a legislative amendment would eliminate constitutional ambiguity, preserve respect for statutory processes, and permit nuanced adjustments rather than wholesale suspension of provisions.

Another possibility would be judicial determination. Rather than unilaterally suspending PIA provisions through executive order, the Federal Government could have sought a declaratory judgment from the Supreme Court on whether the PIA’s retention mechanisms violate Sections 80 and 162. This approach would have provided authoritative resolution of the constitutional questions, preserved separation-of-powers principles, and avoided allegations of executive overreach. 

A hybrid approach could be to channel all revenues to the Federation Account, while including in the annual Appropriation Acts specific allocations for frontier exploration, gas infrastructure, or other priorities previously funded through earmarked retentions. This would achieve transparency and statutory compliance while maintaining funding for strategic priorities. 

The controversy surrounding Executive Order 9 will not resolve quickly or easily. Multiple pathways forward exist, each with distinct implications for constitutional governance, sectoral stability, and fiscal outcomes.

The most likely scenario involves some form of judicial intervention. Various stakeholders, including NNPC Ltd., PENGASSAN, state governments, or private operators, may seek declaratory or injunctive relief from the courts. Alternatively, resolution through the National Assembly action remains possible. 

The tension at the heart of this controversy is not easily resolved because it reflects genuine competing values: constitutional fidelity versus statutory stability, fiscal discipline versus sectoral autonomy, immediate revenue needs versus long-term strategic investments. 

What is clear is that the current ambiguity serves no one well. Operators need clarity on payment obligations and compliance expectations. NNPC Ltd. requires certainty about its funding sources and operational parameters. Sub-national governments deserve assurance that their constitutional revenue entitlements will be respected. Investors need confidence that regulatory frameworks will remain stable enough to support long-term capital commitments. The path forward should therefore prioritise resolution over prolonged contestation. 

Funmilayo Odude is a Partner at Commercial and Energy Law Practice (CANDELP).