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President Bola Tinubu has signed a sweeping executive order directing the immediate remittance of oil and gas revenues to the Federation Account, in a move aimed at curbing revenue leakages, eliminating duplicative deductions, and strengthening fiscal stability across the three tiers of government.
The order, signed on February 13, 2026, invokes Section 5 of the 1999 Constitution (as amended) and is anchored on Section 44(3), which vests ownership and control of all mineral resources in the Government of the Federation.
Under the new directive, all royalty oil, tax oil, profit oil, profit gas and any other revenues due to the Federal Government from production sharing contracts (PSCs), profit sharing contracts, and risk service contracts must be paid directly into the Federation Account.
A major highlight of the order is the withdrawal of the 30 per cent Frontier Exploration Fund previously managed by under the Petroleum Industry Act (PIA). The President directed that the 30 per cent profit oil and gas allocation for frontier exploration be transferred henceforth to the Federation Account.
The executive order also abolishes the 30 per cent management fee on profit oil and profit gas that NNPC Limited had been retaining under the PIA framework. The Federal Government argued that the additional fee was unjustified, given that the company already retains 20 per cent of its profits for working capital and future investments.
Presidency sources said the various deductions allowed under the PIA, including management fees, profit retentions and exploration funds, have cumulatively diverted more than two-thirds of potential oil and gas revenues away from the Federation Account, contributing to declining net inflows.
President Tinubu also suspended payments of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF). Going forward, all proceeds from gas flare penalties will be paid directly into the Federation Account. Expenditures from the MDGIF, where applicable, must comply strictly with public procurement laws and regulations.
The order further raises structural concerns about NNPC Limited’s dual role as both concessionaire and commercial operator under production sharing contracts, noting that the arrangement creates potential competitive distortions and undermines its transition into a fully commercial entity as envisaged by the PIA.
To ensure effective implementation, the President approved the establishment of an inter-ministerial committee comprising 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, and the Minister of State for Petroleum Resources (Oil). Other members include the Chairman of the Nigeria Revenue Service, a representative of the Ministry of Justice, the President’s Special Adviser on Energy, and the Director-General of the Budget Office of the Federation, who will serve as secretary.
The Presidency described the reforms as urgent and critical to national budgeting, debt sustainability and economic stability, adding that a comprehensive review of the Petroleum Industry Act will be undertaken in consultation with stakeholders to address fiscal and structural anomalies.
According to the State House, the executive order has been officially gazetted and takes immediate
