The South-South Governors Forum (SSGF) has put its weight behind the executive order by President Bola Tinubu on oil revenue remittance.
President Tinubu ordered direct remittance of oil revenues to the Federation Account which the governors described as a historic and landmark decision.
Duoye Diri, Chairman of the forum and Governor of Bayelsa State, said in a statement on Wednesday, that the governors welcomed the decision as a critical shift towards the restoration of constitutional integrity in the petroleum sector.
Diri said the Executive Order was comprehensive, unambiguous and heartwarming, and that it raised hope that after many years of opaque and complex deduction structures, the federal, state, and local governments would begin to receive their rightful entitlements from the Federation Account.
The statement read: “The South-South region particularly welcomes the key provisions of the Executive Order, which would eliminate opaque deductions and effectively strip the Nigerian National Petroleum Company Limited (NNPCL) of the nebulous 30 per cent Frontier Exploration Fund. This 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.
“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 governors also expressed appreciation to President Tinubu for his move to undertake a comprehensive review of the Petroleum Industry Act (PIA).
The forum said it is an affirmation that President Tinubu is a leader who listens and places the interest of the people above other considerations.
According to the statement, states like Bayelsa had persistently advocated for a review of the PIA as the extant act was a ticking time bomb.
“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.
“We also urge the Federal Government to immediately review the aspect where states and local governments 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”, the statement said.
