President Bola Tinubu has signed an Executive Order effectively ending the era of off-budget deductions by the Nigerian National Petroleum Company Limited (NNPCL), directing that all oil and gas revenues be remitted directly to the Federation Account.
The directive, officially gazetted on February 13, 2026, and announced by the Presidency on Wednesday, aims to dismantle what officials describe as unconstitutional fiscal channels created by the 2021 Petroleum Industry Act (PIA). By bypassing the state oil firm’s internal accounts, the administration seeks to boost national liquidity and restore revenue entitlements to the federal, state, and local governments.
Under the new order, NNPCL is no longer entitled to a 30 per cent management fee on profit oil and gas derived from Production Sharing and Risk Service Contracts. The Federal Government argued that the company’s existing 20 per cent profit retention for working capital is "sufficient" to support its commercial functions, rendering the additional management fee "unjustified".
The President also ordered the immediate cessation of the 30 per cent Frontier Exploration Fund. Previously used by NNPCL for speculative hydrocarbon searches in inland basins, these funds must now be transferred directly to the Federation Account. The administration expressed concern that the fund risked accumulating "large idle cash balances", which encouraged "inefficient exploration spending" at a time when resources are needed for national security and healthcare.
Further tightening the fiscal reins, the Executive Order suspends the payment of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF). All proceeds from environmental penalties imposed on operators will now flow into the Federation Account. The President noted that a separate Environmental Remediation Fund already exists under the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to handle community rehabilitation, making the MDGIF's current funding structure redundant.
To ensure compliance, the President has approved a high-level implementation committee. The team includes the Minister of Finance and Coordinating Minister of the Economy, the Attorney-General of the Federation, and the Minister of State for Petroleum Resources.