What the Executive Order Changes
Under the new policy:
- NNPCL will no longer retain the 30 per cent management fee on profit oil and profit gas previously allowed under the PIA.
- The 30 per cent Frontier Exploration Fund retention is also abolished, with those funds now directed to the Federation Account.
- All bonuses, royalties, taxes, and government entitlements such as royalty oil, tax oil, profit oil, and profit gas must now be paid directly into the Federation Account by operators and contractors from February 13, 2026.
Payments of gas flaring penalties previously remitted to the Midstream and Downstream Gas Infrastructure Fund (MDGIF) will be redirected into the Federation Account. Moreover, this will also occur under stricter procurement guidelines.
These reforms are intended to stop revenue leakages and eliminate duplicative deduction structures that have significantly reduced net inflows into the federation’s purse. Tinubu ends NNPC oil revenue deductions to ensure more money goes into the treasury.
Why This Matters for Nigeria’s Economy
The presidency noted that excessive deductions under existing legislation diverted more than two‑thirds of potential oil and gas revenues away from the Federation Account. Consequently, this practice hampered federal, state, and local government budgets.
By eliminating these deductions, the government aims to increase fiscal transparency, strengthen budgeting, and boost resources for national priorities such as security, education, healthcare, and economic development. Furthermore, Tinubu ends NNPC oil revenue deductions to help drive economic progress.
Implementation and Oversight
To ensure the reforms take effect smoothly, the President has approved the creation of an implementation committee. This committee will comprise key ministers and revenue officials. They will oversee the coordinated execution of the order.
This executive order marks a major fiscal shift in how Nigeria manages its oil earnings. It also reflects growing efforts to align revenue flows with constitutional requirements and national development goals.
