President Bola Tinubu has signed an Executive Order mandating the direct remittance of oil and gas revenues to the Federation Account, in a move aimed at blocking revenue leakages, eliminating duplicative deductions, and strengthening public finances.
According to a State House statement issued by presidential spokesman Bayo Onanuga, the order seeks to restore the constitutional revenue entitlements of federal, state, and local governments, which the administration says were significantly reduced under provisions of the Petroleum Industry Act.
The Executive Order halts the retention of 30 per cent of profit oil and profit gas previously allocated as a Frontier Exploration Fund and ends the 30 per cent management fee collected by Nigerian National Petroleum Company Limited on production and profit-sharing contracts. These funds will now be paid directly into the Federation Account.
The President also directed that royalty oil, tax oil, profit oil, profit gas, and other government entitlements under production sharing contracts be remitted straight to the Federation Account effective February 13, 2026.
In addition, payments of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund have been suspended. Proceeds from such penalties will now be transferred to the Federation Account, with expenditures subject to public procurement laws.
The administration said the reforms are necessary to curb excessive deductions, improve transparency, reposition NNPC Limited as a fully commercial entity, and enhance revenue available for national priorities such as security, healthcare, education, and energy transition.
President Tinubu also approved the formation of an inter-ministerial implementation committee to ensure coordinated execution of the directive and announced plans for a broader review of the Petroleum Industry Act in consultation with stakeholders.
The Presidency described the reforms as urgent, citing their implications for national budgeting, debt sustainability, and overall economic stability.
