Nigeria Implements Executive Order to Reform Petroleum Revenue Management and Protect Federal Funds Nationwide

On February 26, 2026, Nigeria took a major step to tighten oversight of its oil and gas sector.

The Implementation Committee for Executive Order 9 of 2026 convened for the first time to operationalize President Bola Ahmed Tinubu’s directive on safeguarding federal revenues and improving petroleum revenue flows.

The meeting, chaired by Honourable Minister of Finance and Coordinating Minister of the Economy, Wale Edun, highlighted the government’s commitment to ensure that revenues from petroleum operations uphold constitutional principles, protect federation earnings, and strengthen fiscal stability across federal, state, and local governments.

Suspension of Key Deductions

One immediate outcome of the meeting is the suspension of certain deductions previously collected by NNPC Limited.

Effective immediately:

The 30% management fee under Production Sharing Contracts (PSCs) will no longer be collected.
The 30% frontier exploration fund deduction from profit oil and gas is also suspended.
Remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF) are halted.

The Committee emphasized that these actions are aimed at protecting federal revenues while maintaining fiscal stability.

Transition to Direct Payments

Executive Order 9 also directs that contractors pay profit oil, royalty oil, and tax oil directly into the Federation Account.

The Committee agreed that this transition must respect existing contracts and financing arrangements to maintain investor confidence.

A transition period has been approved during which contractors will continue to remit payments under the current system until detailed guidelines are issued.

This approach is designed to ensure an orderly changeover and prevent disruption in revenue collection.

Establishing a Technical Subcommittee

To guide the process, a Technical Subcommittee has been formed. Its tasks include:

Developing detailed guidelines for direct remittance within three weeks.
Reviewing the Petroleum Industry Act (PIA) to identify structural and fiscal gaps that reduce federation revenues.

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The Subcommittee is chaired by the Special Adviser to the President on Energy and includes key stakeholders: the Solicitor-General of the Federation, Permanent Secretary of the Federal Ministry of Justice, Chairman of the Nigeria Revenue Service, Chairman of the Forum of Commissioners of Finance, and representatives of the Minister of State for Petroleum Resources, with support from the Budget Office of the Federation.

Strengthening Accountability and Coordination

The Implementation Committee will continue to provide guidance and updates as the Executive Order is operationalized.

The Committee praised the cooperation of all stakeholders and reiterated that Nigeria’s petroleum resources must deliver tangible benefits to citizens across the Federation.

Impact and Consequences

The Executive Order and its implementation could have wide-ranging effects:

Revenue Protection: Direct remittance into the Federation Account ensures more transparent and timely collection of petroleum revenues.
Investor Confidence: The transition period is designed to prevent disruption and maintain confidence among oil and gas contractors.
Fiscal Stability: Suspension of certain deductions safeguards federal revenue and strengthens government budgets.
Policy Reform: Review of the Petroleum Industry Act could address inefficiencies and close loopholes that reduce revenue.
Enhanced Oversight: Clear guidelines and a Technical Subcommittee provide structured, accountable management of petroleum funds.

What’s Next?

The Technical Subcommittee will release comprehensive guidelines within three weeks to guide the transition to direct remittance.

Concurrently, the review of the Petroleum Industry Act will commence to ensure long-term fiscal sustainability.

Contractors and stakeholders should expect detailed instructions to be issued soon, with phased implementation to avoid disruptions in revenue flow.

Summary

Nigeria’s Executive Order 9 of 2026 marks a decisive effort to modernize and strengthen petroleum revenue management.

Immediate suspensions of certain deductions, the transition to direct remittance by contractors, and a structured review of the Petroleum Industry Act signal the government’s commitment to transparency, accountability, and fiscal stability.

The coordinated approach is designed to protect federal revenue while maintaining investor confidence.

Bulleted Takeaways

Executive Order 9 of 2026 aims to safeguard federal petroleum revenues.
NNPC Limited suspends 30% management fee and frontier exploration fund deductions.
Gas flare penalty remittances into MDGIF are halted.
Contractors will transition to direct payments into the Federation Account under a defined period.
A Technical Subcommittee will develop guidelines within three weeks.
Petroleum Industry Act review will address structural and fiscal weaknesses.
Measures are intended to enhance transparency, accountability, and fiscal stability.
Implementation Committee will provide coordinated guidance and updates throughout the process.