President Bola Tinubu has signed a sweeping Executive Order mandating the direct remittance of all oil and gas revenues to the Federation Account, a move aimed at boosting revenue allocations to federal, state, and local governments.
The Executive Order, signed on February 13, 2026, and gazetted immediately, effectively halts deductions and retentions previously permitted under the Petroleum Industry Act. The presidency said the decision was necessary to restore full constitutional revenue entitlements and block revenue leakages.
A major provision of the order ends the 30 percent management fee retained by NNPC Limited on Profit Oil and Profit Gas from Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts. The government noted that the existing 20 percent profit retention allowed under the law is sufficient to cover the company’s operational and investment needs.
The order also abolishes the 30 percent retention previously allocated to the Frontier Exploration Fund and directs that such funds be paid directly into the Federation Account to prevent the buildup of idle balances.
In addition, oil and gas operators are now required to remit Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and all other government entitlements directly to the Federation Account with immediate effect.
The President further ordered the suspension of gas flare penalty payments into the Midstream and Downstream Gas Infrastructure Fund, directing that future payments be made into the Federation Account in line with constitutional provisions.
The presidency said the existing framework had allowed deductions that far exceeded global standards, diverting a significant portion of oil revenues away from government coffers.
President Tinubu also raised concerns over the dual role of NNPC Limited as both concessionaire and commercial operator, noting that it undermines transparency and the company’s transition into a fully commercial entity.
To ensure effective implementation, the President approved the establishment of a joint project team, with the Nigerian Upstream Petroleum Regulatory Commission serving as the coordinating interface.
An implementation committee chaired by the Minister of Finance will also include key officials such as the Attorney-General, Minister of Budget and National Planning, Minister of State for Petroleum Resources, Chairman of the Federal Inland Revenue Service, Special Adviser to the President on Energy, and the Director-General of the Budget Office.
The presidency expressed confidence that the directive will significantly improve revenue flows, strengthen fiscal stability, and enhance transparency in Nigeria’s oil and gas sector.
