TINUBU SIGNS LANDMARK EXECUTIVE ORDER, DIRECTS NNPC TO REMIT OIL, GAS REVENUES STRAIGHT TO FEDERATION ACCOUNT

President Bola Ahmed Tinubu has signed a sweeping Executive Order mandating the direct remittance of oil and gas revenues to the Federation Account, in what the Presidency describes as a decisive move to curb leakages, eliminate duplicative structures, and restore constitutionally guaranteed revenues to the three tiers of government.

The Executive Order, signed pursuant to Section 5 of the Constitution of the Federal Republic of Nigeria (as amended), is anchored on Section 44(3), which vests ownership and control of all mineral resources, including oil and gas, in the Government of the Federation.
Ending Revenue Deductions Under PIA Framework
At the heart of the reform is a major restructuring of revenue deductions introduced under the Petroleum Industry Act (PIA).
Under the existing framework, NNPC Limited retains:
30% of the Federation’s oil revenues as a management fee on Profit Oil and Profit Gas from Production Sharing, Profit Sharing, and Risk Service Contracts;
20% of its profits for working capital and future investments; and
An additional 30% of profit oil and profit gas for the Frontier Exploration Fund.
The Federal Government considers the additional 30% management fee unjustifiable, arguing that the 20% retained earnings already sufficiently cover operational requirements. The Frontier Exploration Fund, meanwhile, has been criticized as a large speculative pool that risks accumulating idle funds at a time when resources are urgently needed for national priorities such as security, healthcare, education, and energy transition investments.
The President’s directive now eliminates the 30% management fee and halts NNPC Limited’s collection and management of the 30% Frontier Exploration Fund. Both streams of revenue are to be transferred directly to the Federation Account.
Direct Remittance of Oil and Gas Revenues
Effective February 13, 2026, all operators and contractors under Production Sharing Contracts are required to pay Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and all other government entitlements directly into the Federation Account.
NNPC Limited will no longer collect or manage these funds on behalf of the Federation.
The Executive Order also suspends the payment of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF). Instead, proceeds from gas flaring penalties will now be paid directly into the Federation Account. Any expenditure from the MDGIF must comply strictly with public procurement laws and regulations.
Addressing Structural Conflicts
President Tinubu also raised structural concerns about NNPC Limited’s continued role as a concessionaire under Production Sharing Contracts, noting that the arrangement allows the company to influence operating costs while functioning as a commercial entity — a dual role that could create competitive distortions.
The Executive Order introduces immediate measures to enhance transparency, eliminate redundant deductions, and reposition NNPC Limited strictly as a commercial enterprise in line with the reform objectives of the PIA.
Implementation Committee Constituted
To ensure seamless execution, the President approved the establishment of a high-level implementation committee. Members include:
The Minister of Finance and Coordinating Minister of the Economy
The Attorney-General of the Federation and Minister of Justice
The Minister of Budget and National Planning
The Minister of State for Petroleum Resources (Oil)
The Chairman, Nigeria Revenue Service
A representative of the Ministry of Justice
The Special Adviser to the President on Energy
The Director-General, Budget Office of the Federation (Secretariat)
The committee is tasked with overseeing coordinated implementation and addressing any legal or fiscal complexities arising from the reforms.
“Urgent National Importance”
Describing the reforms as being of urgent national importance, President Tinubu emphasized their implications for national budgeting, debt sustainability, economic stability, and the overall well-being of Nigerians.
The President also signaled that his administration will undertake a comprehensive review of the Petroleum Industry Act in consultation with stakeholders to correct fiscal and structural anomalies identified since its enactment.
With this Executive Order, the Tinubu administration positions itself for a direct confrontation with entrenched revenue retention mechanisms in the oil and gas sector, aiming to significantly boost net inflows into the Federation Account and strengthen fiscal capacity across federal, state, and local governments.