RismadarVoice Reporters
February 18, 2026
President Bola Ahmed 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 government earnings, eliminating revenue leakages, and restructuring oversight within the petroleum sector.
The President signed the order invoking powers under Section 5 of the 1999 Constitution (as amended).
The directive is also anchored on Section 44(3) of the Constitution, which vests ownership and control of all minerals, mineral oils, and natural gas in the Government of the Federation.
According to the State House, the Executive Order seeks to restore constitutional revenue entitlements of the federal, state, and local governments, which it said were significantly reduced under provisions of the Petroleum Industry Act (PIA) 2021.
Key Changes:
Under the PIA framework, NNPC Limited currently retains:
• 30% of the Federation’s oil revenues as a management fee on Profit Oil and Profit Gas from Production Sharing Contracts (PSCs), Profit Sharing Contracts, and Risk Service Contracts;
• 20% of its profits for working capital and future investments; and
• Another 30% as the Frontier Exploration Fund under Sections 9(4) and (5) of the PIA.
The Federal Government argued that these deductions collectively divert more than two-thirds of potential remittances to the Federation Account, contributing to declining net oil revenue inflows.
With the new Executive Order:
• NNPC Limited will no longer collect or manage the 30% Frontier Exploration Fund, and the earmarked profits will now be transferred directly to the Federation Account.
• The company will no longer retain the 30% management fee on Profit Oil and Profit Gas due to the Federation.
• All operators and contractors under Production Sharing Contracts are to remit Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and any other government-entitled revenues directly to the Federation Account.
• Payments of Gas Flare Penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF) have been suspended, with such penalties now payable into the Federation Account.
The government also directed that all expenditures from the MDGIF must comply strictly with existing public procurement laws and regulations.
Structural Reforms:
The Presidency said the reforms are designed to eliminate duplicative structures within the PIA framework and reposition NNPC Limited strictly as a commercial enterprise. Concerns had been raised over the company’s dual role as both concessionaire and commercial operator under Production Sharing Contracts, which the government said could create competitive distortions.
President Tinubu described the reforms as urgent and critical to national budgeting, debt sustainability, economic stability, and overall public welfare.
He also announced plans for a comprehensive review of the Petroleum Industry Act in consultation with stakeholders to address identified fiscal and structural anomalies.
Implementation Framework:
To ensure coordinated implementation, the President approved the establishment of an Implementation Committee comprising:
• Minister of Finance and Coordinating Minister of the Economy
• Attorney-General of the Federation and Minister of Justice
• Minister of Budget and National Planning
• Minister of State for Petroleum Resources (Oil)
• Chairman, Nigeria Revenue Service
• Representative of the Ministry of Justice
• Special Adviser to the President on Energy
• Director-General, Budget Office of the Federation (Secretariat)
Additionally, a joint project team will be constituted to execute integrated petroleum operations, with the Commission serving as the interface with licensees and lessees.
