President Bola Tinubu has signed an Executive Order (EO) to protect and enhance oil and gas revenues, curb wasteful spending, remove duplicative structures, and redirect resources to benefit Nigerians.
The EO, issued under Section 5 of the Constitution, builds on Section 44(3), which vests ownership and control of minerals, oil, and gas—including offshore and territorial waters—in the Federal Government.
It aims to restore the constitutional revenue entitlements of the federal, state, and local governments, which were reduced under the 2021 Petroleum Industry Act (PIA).
The EO addresses excessive deductions under PIA, including NNPC Limited’s 30 per cent management fee on Profit Oil and Profit Gas and an additional 30 per cent under the Frontier Exploration Fund.
NNPC Limited would no longer collect these fees. All profits earmarked for the Frontier Exploration Fund would now go directly to the Federation Account, enhancing transparency and national revenue flows.
The order also suspends payments into the Midstream and Downstream Gas Infrastructure Fund, with proceeds from gas-flaring penalties redirected to the Federation Account in line with public procurement rules.
Operators under Production Sharing Contracts must pay royalties, Profit Oil, Profit Gas, Tax Oil, and other dues directly to the Federation Account, effective February 13, 2026.
President Tinubu highlighted structural concerns about NNPC Limited’s dual role as concessionaire and commercial operator, noting that commercial functions should not compromise revenue collection or competition.
A joint project team and Implementation Committee, including the Ministers of Finance, Petroleum, Justice, and Budget, has been set up to coordinate execution and ensure compliance with the EO.
The reforms are considered urgent, given their implications for budgeting, debt sustainability, economic stability, and the well-being of Nigerians, with a broader review of the PIA planned to address structural anomalies.
