President Tinubu Signs Executive Order To Redirect Oil And Gas Revenues

President Bola Tinubu has signed an Executive Order mandating the direct remittance of all oil and gas revenues to the Federation Account, effectively bypassing deductions and retentions previously allowed under the Petroleum Industry Act (PIA) of 2021.

The order, signed on February 13, 2026, and gazetted immediately, aims to restore full constitutional revenue entitlements to the federal, state, and local governments by eliminating what the presidency describes as excessive and duplicative deductions that have significantly reduced inflows to the Federation Account.

Key provisions of the Executive Order include:

– Ending NNPC Limited’s 30% management fee on Profit Oil and Profit Gas from Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts. The government argues that the existing 20% profit retention for working capital and investments already covers NNPC’s operational needs.

– Abolishing NNPC’s 30% retention for the Frontier Exploration Fund under Sections 9(4) and (5) of the PIA. All such funds must now be transferred directly to the Federation Account, preventing the accumulation of large idle balances for speculative exploration.

– Requiring operators and contractors under production sharing arrangements to pay Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and all other government entitlements directly to the Federation Account starting February 13, 2026.

– Suspending payments of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF). All future penalties will go to the Federation Account, with existing MDGIF expenditures required to comply fully with public procurement laws.

The presidency stated that the current PIA framework has allowed deductions that “far exceed global norms” and divert more than two-thirds of potential revenues away from the Federation Account. The declining net oil revenue inflows are largely attributed to these structures and fragmented oversight.

President Tinubu also highlighted structural concerns with NNPC Limited continuing to act as both concessionaire and commercial operator under Production Sharing Contracts, which he said creates competitive distortions and hinders the company’s transition to a fully commercial entity as intended by the PIA.

To implement the reforms, the President has approved:

– The constitution of a joint project team, with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) serving as the interface for integrated upstream and midstream operations.

– An implementation committee chaired by the Minister of Finance and Coordinating Minister of the Economy, and including the Attorney-General, Minister of Budget and National Planning, Minister of State for Petroleum Resources (Oil), Chairman of the Federal Inland Revenue Service, Special Adviser to the President on Energy, and the Director-General of the Budget Office.