President Bola Tinubu has signed an Executive Order suspending the collection of management and frontier exploration fees by the Nigerian National Petroleum Company Limited (NNPCL) and directing the full remittance of oil and gas revenues to the Federation Account.
The directive was disclosed on Wednesday in a statement by Mohammed Manga, Director of Information and Public Relations at the Federal Ministry of Finance.
According to the ministry, the move is designed to realign oil and gas revenue flows with constitutional provisions, curb leakages, and strengthen fiscal transparency amid declining inflows into the Federation Account despite improved production and favourable market conditions.
What they are saying
The Finance Ministry said the President signed the Executive Order last week to safeguard revenues due to the Federation and prevent deductions at source under existing fiscal arrangements. It explained that the order mandates the direct remittance of taxes, royalties, and profit oil under Production Sharing Contracts to the appropriate fiscal authorities.
- “Last week, His Excellency President Bola Tinubu signed an Executive Order aimed at realigning oil and gas revenue flows with constitutional requirements. The Order seeks to strengthen fiscal transparency, clarify regulatory mandates, and enhance revenues accruing to the Federation from the oil and gas sector.”
- “The Executive Order reinforces the provisions of the 1999 Constitution of the Federal Republic of Nigeria, which vest ownership of mineral resources in the Federation and require that all revenues derived from those resources be paid into the Federation Account for appropriation in accordance with established constitutional and statutory rules.”
- “The Order has become both necessary and urgent considering the sustained decline in oil and gas revenue inflows into the Federation Account, despite improvements in production levels and favourable market conditions. This shortfall has constrained the government’s capacity to meet budgetary obligations and to finance critical public investments in education, healthcare, and infrastructure.”
The ministry added that the oil and gas sector must operate in a manner that delivers transparent, constitutionally compliant, and fully accounted revenue flows to benefit the broader economy.
More insights
The Executive Order addresses fiscal and structural arrangements introduced under the Petroleum Industry Act, which restructured the oil and gas industry and commercialised NNPC into a limited liability company. Some of these arrangements, according to the ministry, resulted in off-budget allocations and deductions from Federation revenues.
- The order suspends NNPCL’s collection of management and frontier exploration fees.
- It halts payments of gas flare penalties into the Midstream Gas Infrastructure Fund.
- It clarifies the delineation of responsibilities between the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
- It establishes an inter-agency implementation committee chaired by the Minister of Finance and Coordinating Minister for the Economy to ensure seamless execution.
The Executive Order takes immediate effect and is described as an interim corrective measure pending legislative amendments to entrench the reforms in statute.
What you should know
NNPCL remains a critical contributor to federal revenues, and the new directive signals tighter oversight of oil revenue administration, with potential implications for its cost recovery and funding mechanisms under the Petroleum Industry Act.
- NNPCL remitted N14.706 trillion in statutory payments to the Federal Government between January and December 2025.
- Its Monthly Report Summary for December 2025 showed total revenue of N60.5 trillion for the year.
- The company recorded a profit after tax of N5.76 trillion in 2025.
- In May 2025, President Tinubu also signed the Upstream Petroleum Operations Cost Efficiency Incentives Order, introducing performance-based tax incentives for upstream operators that achieve verifiable cost savings aligned with defined industry benchmarks.
