The South-South Governors Forum (SSGF) has backed the executive order 9 (EO9) on oil revenue remittance.
On February 18, President Bola Tinubu signed an executive order for the direct remittance of oil and gas revenues to the federation account.
A statement on Wednesday by Douye Diri, the SSGF chairman and governor of Bayelsa state, said the governors welcomed the decision as a critical shift towards restoration of constitutional integrity in Nigeria’s petroleum sector.
The forum said the order would eliminate “opaque deductions” and effectively strip the Nigerian National Petroleum Company (NNPC) Limited of the “nebulous 30 percent Frontier Exploration Fund”.
The governors added that the exploration fund often led to large idle cash balances.
“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,” the statement reads.
“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.”
The forum also commended Tinubu’s decision to undertake a comprehensive review of the Petroleum Industry Act (PIA),
The governors said the move is an affirmation that he is a leader that listens and places the interest of the people above other considerations.
“The PIA, as it was designed, is a time bomb because the Federal Government cut off states and local government councils to deal directly with communities. It is our submission that the percentage due oil communities that was reduced from 10 per cent, as proposed by majority of states in the region, to three per cent be revisited and reviewed,” the statement reads.
“We also urge the Federal Government to immediately review the aspect where states and local government 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 crisis and we urge Mr President to review it.”
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