President Bola Tinubu has signed a new Executive Order directing the immediate remittance of oil and gas revenues to the Federation Account, in a move the Presidency says will curb revenue leakages, eliminate duplicative structures, and strengthen national finances.

The directive, signed on February 13, 2026, was issued pursuant to Section 5 of the 1999 Constitution (as amended) and is anchored on Section 44(3), which vests ownership and control of mineral resources in the Federal Government.

According to a State House statement released Tuesday by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the order seeks to “restore the constitutional revenue entitlements of the Federal, State, and Local Governments,” which the Presidency argues were weakened under certain provisions of the Petroleum Industry Act (PIA) enacted in 2021.

The Presidency noted that under the current PIA framework, the Nigerian National Petroleum Company (NNPC) Limited retains 30 percent of the Federation’s oil revenues as a management fee on Profit Oil and Profit Gas derived from Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts.

In addition, the company retains 20 percent of its profits for working capital and future investments.

Given this structure, the Federal Government described the additional 30 percent management fee as “unjustified,” arguing that the retained earnings are already sufficient to support NNPC Limited’s functions.

The statement also referenced the 30 percent allocation to the Frontier Exploration Fund under Sections 9(4) and (5) of the PIA, warning that such a large fund devoted to speculative exploration risks “accumulating large idle cash balances,” at a time when public resources are urgently needed for security, education, healthcare, and energy transition investments.

“All these deductions far exceed global norms and effectively divert more than two-thirds of potential remittances to the Federation Account,” the statement said, adding that the continuing decline in net oil revenue inflows is largely attributable to these deductions and fragmented oversight.

Under the new Executive Order:

NNPC Limited will no longer collect and manage the 30 percent Frontier Exploration Fund. The 30 percent profit from oil and gas contracts previously earmarked for the fund will now be transferred directly to the Federation Account.
NNPC Limited will cease to be entitled to the 30 percent management fee on Profit Oil and Profit Gas revenues.
All operators and contractors holding oil and gas assets under Production Sharing Contracts are required, effective February 13, 2026, to pay Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and any other government dues directly into the Federation Account.

The President also suspended 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 any expenditure from the MDGIF must comply with extant public procurement laws.

President Tinubu further raised concerns about the continued role of NNPC Limited as a concessionaire under Production Sharing Contracts, noting that the existing framework allows the company to influence operating costs while functioning as a commercial entity.

According to the Presidency, this arrangement “creates potential competitive distortions and undermines its transition into a fully commercial operator as envisioned under the PIA.”

The Executive Order introduces measures aimed at curbing leakages, enhancing transparency, and repositioning NNPC Limited strictly as a commercial enterprise while safeguarding the Federation’s interests.

Describing the reforms as urgent, the President said they are critical to national budgeting, debt sustainability, economic stability, and the overall well-being of Nigerians.

He also approved the establishment of an implementation committee comprising key officials, including the Minister of Finance and Coordinating Minister of the Economy, the Attorney-General of the Federation, the Minister of Budget and National Planning, and the Minister of State for Petroleum Resources (Oil), among others.

The administration has indicated that a comprehensive review of the Petroleum Industry Act will follow, in consultation with relevant stakeholders, to address what it described as fiscal and structural anomalies in the current framework.