President Bola Tinubu has signed a sweeping executive order aimed at overhauling how Nigeria’s oil and gas earnings are managed, directing that all such revenues be paid straight into the Federation Account.
The new directive, known as Presidential Executive Order No. 9 of 2026 on Safeguarding Federation Oil and Gas Revenues and Providing Regulatory Clarity, takes effect from February 13, 2026, and has already been published in the official gazette.
Direct Remittance to Federation Account
Under the order, oil and gas proceeds that were previously subject to various deductions and retentions under the Petroleum Industry Act (PIA) 2021 will now be remitted in full to the Federation Account.
The move is designed to eliminate what the presidency described as excessive charges, overlapping funding mechanisms, and structural inefficiencies that have reduced remittances over time.
In a statement shared Wednesday night via his 𝕏 account, Tinubu said the reform is intended to block revenue leakages and strengthen fiscal transparency in the petroleum sector.
Major Financial Changes
A key provision of the order terminates the 30 percent management fee previously retained by the Nigerian National Petroleum Company Limited (NNPCL) from Profit Oil and Profit Gas under Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts.
The government maintains that the existing 20 percent profit retention allowance is sufficient to meet the company’s operational and investment needs.
The order also scraps NNPCL’s 30 percent allocation to the Frontier Exploration Fund as provided under Sections 9(4) and (5) of the PIA.
Going forward, such funds must be transferred directly into the Federation Account, a step officials say will prevent idle balances from accumulating for speculative ventures.
Operators and contractors engaged in production sharing arrangements are now required to remit Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and all other government entitlements straight to the Federation Account.
In addition, gas flare penalties will no longer be paid into the Midstream and Downstream Gas Infrastructure Fund (MDGIF).
Instead, those funds will be channeled directly to the Federation Account, while any ongoing MDGIF spending must strictly comply with public procurement regulations.
Regulatory Clarity
The executive order further outlines clearer boundaries between the roles of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), with the aim of reducing bureaucratic overlaps and improving sector coordination.
Implementation Framework
To ensure smooth execution, the President has approved the formation of a joint project team, with the NUPRC designated as the coordinating interface for integrated upstream and midstream operations.
An implementation committee has also been set up, chaired by the Minister of Finance and Coordinating Minister of the Economy.
The committee includes the Attorney-General of the Federation, the Minister of Budget and National Planning, the Minister of State for Petroleum Resources (Oil), the Chairman of the Federal Inland Revenue Service, the President’s Special Adviser on Energy, and the Director-General of the Budget Office.
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With the order now in force, the administration says it expects improved revenue accountability and stronger financial flows to support federal, state, and local governments across the country.