Tinubu signs landmark executive order to channel Oil, Gas revenues directly to federation account

President Bola Tinubu has signed a landmark Executive Order designed to safeguard and maximise Nigeria’s oil and gas revenues, curb wasteful spending, and eliminate duplicative structures in the petroleum sector.

The directive, signed pursuant to Section 5 of the Constitution of the Federal Republic of Nigeria (as amended), seeks to restore the constitutional revenue entitlements of the federal, state, and local governments that were affected by provisions of the 2021 Petroleum Industry Act (PIA).

In a statement issued Wednesday by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the presidency said the order mandates the direct remittance of key oil and gas revenues into the Federation Account.

Key Changes Under the Order

NNPC Retentions Ended: NNPC Limited will no longer collect the 30% Frontier Exploration Fund or the 30% management fee on profit oil and gas.

Direct Revenue Remittance: Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and other levies due under Production Sharing Contracts will now be paid directly into the Federation Account.

Gas Flare Penalties Redirected: Penalties from gas flaring, previously funding the Midstream and Downstream Gas Infrastructure Fund (MDGIF), will now be remitted to the Federation Account, with MDGIF expenditures subject to public procurement laws.

According to the presidency, the reforms address concerns about multiple deductions that significantly reduced inflows to the Federation Account and ensure that NNPC transitions strictly into a commercial operator, eliminating potential conflicts of interest embedded in the previous framework.

Implementation Structure

To execute the reforms, President Tinubu has constituted:

A joint project team to coordinate integrated petroleum operations.

An Implementation Committee comprising senior officials from the Ministry of Finance, Ministry of Budget and National Planning, Ministry of Justice, Ministry of State for Petroleum Resources, the Nigeria Revenue Service, and the Budget Office of the Federation.

The President emphasised that the reforms are central to strengthening Nigeria’s fiscal stability, ensuring debt sustainability, and increasing resources for national priorities including security, education, healthcare, and energy transition.

He also pledged a comprehensive review of the Petroleum Industry Act in consultation with stakeholders to address remaining fiscal and structural gaps.