President Bola Ahmed Tinubu has signed an Executive Order mandating the direct remittance of oil and gas revenues to the Federation Account, in a major fiscal reform aimed at curbing leakages and boosting funds available to federal, state, and local governments.

The order, which has been gazetted, was signed under Section 5 of the 1999 Constitution and anchored on provisions vesting mineral resources in the Federal Government.

In a statement issued by his Special Adviser on Information and Strategy, Bayo Onanuga, the Presidency said the directive is designed to safeguard oil revenues, eliminate overlapping deductions, and redirect resources for national development.

The Presidency said the Petroleum Industry Act (PIA) introduced “structural and legal channels” that enabled large revenue losses through multiple deductions and fees.

Under the existing framework, NNPC Limited was said to retain 30 per cent of profit oil and gas as management fees and 20 per cent of its profits for working capital and investments.

The Federal Government described the additional 30 per cent management fee as unjustified, arguing that retained earnings were sufficient to cover operational needs.

Concerns were also raised over another 30 per cent of profit oil and gas allocated to the Frontier Exploration Fund, which authorities warned could encourage inefficient spending and idle cash accumulation.

The Executive Order also suspends payments of Gas Flare Penalties into the Midstream and Downstream Gas Infrastructure Fund, directing that such proceeds be paid into the Federation Account.

The Presidency noted that environmental remediation is already covered under a separate fund administered by the Nigerian Upstream Petroleum Regulatory Commission.

“All these deductions far exceed global norms and effectively divert more than two-thirds of potential remittances,” the statement said.

Under the new order, NNPC Limited will no longer collect the 30 per cent Frontier Exploration Fund or the 30 per cent management fee. All profit oil, profit gas, royalties, and taxes due to the Federal Government are to be paid directly into the Federation Account from February 13, 2026.

Oil and gas operators under production-sharing and risk service contracts are also required to remit revenues directly.

To oversee implementation, President Tinubu approved an inter-ministerial committee comprising key officials, including the Ministers of Finance, Justice, Budget and National Planning, and Petroleum Resources, alongside representatives of revenue and budget agencies.

The President said the reforms are critical for national budgeting, debt sustainability, and economic stability.

He also announced plans for a comprehensive review of the Petroleum Industry Act in consultation with stakeholders to address fiscal and structural gaps.