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 boosting national revenue, curbing leakages, and eliminating what the Federal Government describes as wasteful and duplicative deductions in the petroleum sector.
The Executive Order, signed on February 13, 2026, is anchored on Section 5 and Section 44(3) of the 1999 Constitution (as amended), which vest ownership and control of all mineral resources in the Government of the Federation. It seeks to restore the constitutional revenue entitlements of the federal, state and local governments, which the Presidency says were eroded following the implementation of the Petroleum Industry Act (PIA) in 2021.
According to the Presidency, the existing PIA framework allows NNPC Limited to retain significant portions of oil and gas revenues through management fees, profit retentions and statutory funds, resulting in the diversion of more than two-thirds of potential inflows meant for the Federation Account.
Under the new directive, NNPC Limited will no longer retain the 30 per cent management fee on profit oil and profit gas derived from production sharing, profit sharing and risk service contracts. The company will also cease managing the 30 per cent Frontier Exploration Fund, with all such revenues now to be transferred directly to the Federation Account.
The Executive Order further suspends payments of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF). Going forward, proceeds from gas flaring penalties will be paid into the Federation Account, while expenditures from the MDGIF will be subject to existing public procurement laws.
In addition, all oil and gas operators under production sharing contracts are now required to remit royalty oil, tax oil, profit oil, profit gas and any other government entitlements directly to the Federation Account.
President Tinubu also approved the establishment of an implementation committee to ensure effective execution of the order. The committee will be chaired by the Minister of Finance and Coordinating Minister of the Economy and includes the Attorney-General of the Federation, the Minister of Budget and National Planning, the Minister of State for Petroleum Resources (Oil), the Chairman of the Nigeria Revenue Service, and other key officials.
The President said the reforms are of urgent national importance, citing their implications for national budgeting, debt sustainability, economic stability and the welfare of Nigerians. He also directed a comprehensive review of the Petroleum Industry Act, in consultation with stakeholders, to address identified fiscal and structural anomalies.
The announcement was contained in a statement issued on Tuesday by Bayo Onanuga, Special Adviser to the President on Information and Strategy.