President Bola Tinubu has directed the suspension of management and frontier exploration fees previously collected by the Nigerian National Petroleum Company Limited (NNPC Ltd.), as part of a far-reaching Executive Order designed to protect oil and gas revenues accruing to the Federation.
The directive was disclosed on Wednesday in a statement issued by Uloma Amadi, Assistant Director of Information and Public Relations at the Federal Ministry of Finance. According to the ministry, the Executive Order — signed last week — mandates the direct remittance of taxes, royalties and profit oil from Production Sharing Contracts to the relevant fiscal authorities, effectively ending deductions at source.
The government said the measure seeks to align oil revenue administration with constitutional provisions and curb leakages that have reduced inflows into the Federation Account.
“Last week, His Excellency President Bola Tinubu signed an Executive Order aimed at realigning oil and gas revenue flows with constitutional requirements. The Order seeks to strengthen fiscal transparency, clarify regulatory mandates, and enhance revenues accruing to the Federation from the oil and gas sector,” the statement read.
Under the new framework, NNPC’s collection of management and frontier exploration fees has been put on hold. The order also suspends the payment of gas flare penalties into the Midstream Gas Infrastructure Fund and clarifies the respective roles of the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
An inter-agency implementation committee, to be chaired by the Minister of Finance and Coordinating Minister for the Economy, has been established to oversee enforcement of the directive.
The ministry explained that the order reinforces provisions of the 1999 Constitution, which vests ownership of mineral resources in the Federation and requires that revenues derived from them be paid into the Federation Account.
“The Executive Order reinforces the provisions of the 1999 Constitution of the Federal Republic of Nigeria, which vest ownership of mineral resources in the Federation and require that all revenues derived from those resources be paid into the Federation Account for appropriation in accordance with established constitutional and statutory rules,” the statement said.
It further noted that the action addresses fiscal structures introduced under the Petroleum Industry Act 2021 that have enabled off-budget allocations and deductions from Federation revenues.
According to the ministry, the intervention became urgent due to declining oil and gas receipts into the Federation Account, despite improved production levels and favourable market prices.
“The Order has become both necessary and urgent considering the sustained decline in oil and gas revenue inflows into the Federation Account, despite improvements in production levels and favourable market conditions.
“This shortfall has constrained the government’s capacity to meet budgetary obligations and to finance critical public investments in education, healthcare, and infrastructure,” it stated.
The government emphasised that the oil and gas industry must operate in a transparent and constitutionally compliant manner that ensures full accountability.
“The fundamental purpose of the nation’s oil and gas sector, including the national oil company, is to convert hydrocarbon resources into sustainable revenues, investment, and economic activity that benefit the broader economy. Achieving this objective requires revenue flows that are transparent, constitutionally compliant, and fully accounted for,” the statement added.
Officials said the reforms come at a time of mounting fiscal pressures at home and increasing global competition for energy investments.
“At the same time, global energy markets are becoming more competitive and capital is increasingly selective. In such an environment, Nigeria cannot afford inefficiencies in the management of its most strategic economic asset,” the ministry said.
The Executive Order takes immediate effect and is described as an interim corrective step pending legislative amendments to formally embed the reforms in law.
“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 statement concluded.
