President Bola Tinubu has issued a sweeping Executive Order mandating the Nigerian National Petroleum Company Limited (NNPC) to remit oil taxes, royalties, and profit oil directly to fiscal authorities, suspending its collection of management and frontier exploration fees.
The directive, announced Wednesday by the Ministry of Finance, is aimed at safeguarding oil and gas revenues and addressing leakages that have weakened inflows into the Federation Account.
According to the ministry, the order realigns revenue flows with constitutional provisions, reinforces fiscal transparency, and clarifies regulatory mandates between the Nigerian Upstream Petroleum Regulatory Commission and the Midstream and Downstream Petroleum Regulatory Authority.
“The Executive Order reinforces the provisions of the 1999 Constitution, which vest ownership of mineral resources in the Federation and require that all revenues derived from those resources be paid into the Federation Account,” the statement read.
Key Measures
- Suspension of NNPC’s management and frontier exploration fees.
- Halt of gas flare penalty payments into the Midstream Gas Infrastructure Fund.
- Establishment of an inter-agency implementation committee, chaired by the Minister of Finance, to oversee execution.
The government said the move was urgent given declining oil and gas inflows despite improved production and favourable market conditions. The shortfall, it noted, has constrained the state’s ability to meet budgetary obligations and fund critical investments in education, healthcare, and infrastructure.
The order also addresses fiscal arrangements under the Petroleum Industry Act (PIA) 2021, which introduced off-budget allocations and deductions. Officials argue that these deductions—30 per cent of Production Sharing Contract profits set aside monthly for frontier exploration and management fees—have cost Nigeria nearly 60 per cent of gross oil revenues.
The Executive Order takes immediate effect as an interim corrective measure pending legislative amendments to entrench the reforms.
“Collectively, these measures represent another significant step toward strengthening fiscal discipline, safeguarding revenue integrity, and ensuring that Nigeria’s natural resources deliver tangible value to citizens, investors, and the economy,” the ministry stated.
The move signals tighter federal oversight of oil revenue administration and could reshape NNPC’s cost recovery and funding mechanisms under the PIA.
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