PIA Faces Fresh Scrutiny as Expert Demands Alignment with 1999 Constitution

Sunday Ehigiator

The Petroleum Industry Act (PIA) has come under fresh scrutiny as an Abuja-based accountant, Queen Amina Mohammed, called for urgent amendments to align the law with the 1999 Constitution and prevent potential legal conflicts in Nigeria’s petroleum governance framework.

In her policy review, Mohammed argued that although the PIA represents a landmark reform of the oil and gas sector, some of its provisions may not fully comply with constitutional requirements.

Regarding revenue remittance, she raised concerns about provisions that allow the Nigerian National Petroleum Company Limited (NNPC Limited) to retain petroleum revenues before remitting them.

“The PIA allows NNPC Limited to retain petroleum revenues before remittance, and this potentially conflicts with Section 162 of the Constitution, which mandates that all federal revenues be paid into the Federation Account.”

According to her, while executive directives can address the issue in the short term, they do not replace legislative action.

“An executive order can direct NNPC and related entities to remit all petroleum revenues directly to the Federation Account, ensuring temporary alignment with Section 162. However, the PIA itself still needs amendment or clarification for permanent compliance,” she stated.

On host community funds, Mohammed warned that the allocation structure may sidestep constitutionally recognised revenue-sharing mechanisms.

“Although the PIA mandates contributions to host communities, the allocation mechanisms may bypass state or local authorities. This raises potential constitutional issues regarding federalism and revenue sharing,” she explained.

She added: “An executive order can clarify the flow of funds and ensure allocations respect constitutional federal-state revenue distribution principles, but the Act requires legislative alignment for permanence.”

Addressing regulatory oversight, Mohammed pointed to the structure of agencies such as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

“Agencies like NUPRC currently have both regulatory oversight and quasi-commercial roles. This arrangement could undermine the principle of the separation of powers by blurring the line between regulation and commercial interests.

“An executive directive may compel agencies to focus strictly on regulatory oversight and separate commercial activities from regulation. But without statutory amendment, the structural concerns remain.”

On land and compensation oversight, Mohammed noted possible overlaps with the Land Use Act and judicial authority.

“Granting regulatory agencies authority over land-related disputes may conflict with the Land Use Act and established judicial processes. Courts will always uphold the Constitution in the event of conflict. Only an amendment can permanently clarify this authority,” she said.

Summarising her position, Mohammed described executive orders as “immediate enforcement tools” but emphasised that they are inherently temporary.

“The PIA is a legally binding statute, but some provisions may not fully comply with constitutional requirements. Executive orders can correct or clarify implementation gaps, but the permanent solution is to amend the PIA and, where necessary, harmonise it with the Constitution,” she concluded.