The Federal Government has approved a transition period for the implementation of direct payments by oil contractors into the Federation Account under Executive Order 9 issued by President Bola Ahmed Tinubu.

The decision was taken by the Implementation Committee for Executive Order 9 of 2026 at its inaugural meeting on February 26, 2026.

In a statement on Monday, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the transition period would allow the new system to be introduced without disrupting existing contractual and financing arrangements in the oil sector.

He explained that revenues such as profit oil, royalty oil, and tax oil would eventually be paid directly into the Federation Account to strengthen public finances and protect government revenues.

Edun said contractors would continue with the current payment process until detailed operational guidelines are issued.

The committee also approved the establishment of a technical subcommittee to develop guidelines for the transition within three weeks and review the Petroleum Industry Act to address structural and fiscal gaps affecting revenue.

The subcommittee will be led by the Special Adviser to the President on Energy, Olu Verheijen, with the Budget Office of the Federation serving as secretariat.

As part of the reforms, NNPC Limited has been directed to stop collecting 30 per cent management fees and 30 per cent frontier exploration fund deductions under Production Sharing Contracts, with immediate effect.

In addition, remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund have been suspended.

The Implementation Committee said the measures are aimed at improving transparency, strengthening revenue management, and supporting the fiscal stability of federal, state, and local governments.

The government said the reforms reflect President Tinubu’s broader efforts to ensure Nigeria’s petroleum resources deliver measurable benefits to citizens.