The Federal Government has moved to tighten oversight of Nigeria’s petroleum revenues. By ordering an immediate halt to certain deductions previously made by the NNPC Limited, directing instead that oil proceed paid straight into the Federation Account.
The decision reached at the inaugural meeting of the Implementation Committee for Executive Order 9. Signed by President Bola Ahmed Tinubu, as part of broader reforms aimed at strengthening transparency and boosting national revenue.
Key Changes Announced
Under the new directive:
- NNPC Limited will no longer deduct the 30% management fee from profit oil and gas under Production Sharing Contracts (PSCs).
- The 30% frontier exploration fund deduction from profit oil and gas has also stopped.
- Gas flare penalty remittances into the Midstream and Downstream Gas Infrastructure Fund have suspended.
Hence Going forward, contractors operating under PSC arrangements will make direct payments of profit oil, royalty oil. And tax oil into the Federation Account, ensuring that revenues accrue straight to the federal pool shared by the three tiers of government.
Transition to Protect Investor Confidence
To avoid disrupting existing contractual obligations and to maintain investor confidence, the government has approved a transition period. A Technical Subcommittee has established to develop clear operational guidelines. For the new framework and to review aspects of the Petroleum Industry Act (PIA) considered to have revenue loopholes.
Officials say the reform not designed to undermine ongoing projects. But to close fiscal gaps and enhance accountability in the management of Nigeria’s hydrocarbon wealth.
Strengthening Fiscal Discipline
The Implementation Committee, chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun. Assured stakeholders of continuous engagement and periodic updates as the transition unfolds.
The move signals a renewed push by the Federal Government to ensure that oil revenues fully captured, transparently managed, and channelled toward national development priorities.
Analysts say the policy could significantly improve revenue flows to the Federation Account. Especially at a time when Nigeria is seeking to strengthen public finances and reduce fiscal pressures.
However, With the new directive in place, the government appears set on recalibrating how petroleum earnings are collected and distributed. A shift that could reshape the financial architecture of Nigeria’s oil sector.
