President Bola Tinubu has signed an Executive Order mandating the direct remittance of all oil and gas revenues to the Federation Account, effectively bypassing deductions and retentions previously allowed under the Petroleum Industry Act (PIA) of 2021.
The order, signed on February 13, 2026, and gazetted immediately, aims to restore full constitutional revenue entitlements to the federal, state, and local governments by eliminating what the presidency describes as excessive and duplicative deductions that have significantly reduced inflows to the Federation Account.
Key provisions of the Executive Order include:
– Ending NNPC Limited’s 30% management fee on Profit Oil and Profit Gas from Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts. The government argues that the existing 20% profit retention for working capital and investments already covers NNPC’s operational needs.
– Abolishing NNPC’s 30% retention for the Frontier Exploration Fund under Sections 9(4) and (5) of the PIA. All such funds must now be transferred directly to the Federation Account, preventing the accumulation of large idle balances for speculative exploration.
– Requiring operators and contractors under production sharing arrangements to pay Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and all other government entitlements directly to the Federation Account starting February 13, 2026.
– Suspending payments of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF). All future penalties will go to the Federation Account, with existing MDGIF expenditures required to comply fully with public procurement laws.
