President Bola Tinubu has signed a new executive order directing the direct remittance of oil and gas revenues to the Federation Account, as part of efforts to boost government earnings, block revenue leakages, and eliminate duplicative structures in the petroleum sector.
According to a State House press release, the order was issued under Section 5 of the Constitution and is anchored on Section 44(3), which vests ownership and control of mineral resources in the Federal Government.
The directive seeks to restore revenue entitlements of federal, state, and local governments that were altered following the enactment of the Petroleum Industry Act. The government said several provisions of the law created multiple deductions, charges, and retention frameworks that significantly reduced net remittances to the Federation Account.
Under the new order, NNPC Limited will no longer retain the 30 percent management fee on profit oil and profit gas derived from production sharing, profit sharing, and risk service contracts.
The company is also barred from collecting and managing the 30 percent Frontier Exploration Fund, with such funds now to be paid directly into the Federation Account.
The executive order further mandates that all oil and gas operators under production sharing contracts must remit royalty oil, tax oil, profit oil, profit gas, and other government interests directly to the Federation Account from February 13, 2026.
The presidency said the reforms are aimed at improving transparency, strengthening national budgeting, enhancing debt sustainability, and ensuring more resources are available for priority sectors such as security, education, healthcare, and energy transition
