By SCM Correspondent, Abuja
ABUJA, Nigeria – President Bola Tinubu has signed a landmark executive order that effectively strips the Nigerian National Petroleum Company (NNPC) Limited of its controversial revenue-retention powers, marking the most significant overhaul of the country’s energy fiscal regime since 2021.
The directive, which was gazetted on February 13, 2026, aims to curb “unjustified” financial leakages by mandating that billions of dollars in oil and gas proceeds flow directly into the Federation Account rather than being diverted through the state-owned firm’s balance sheet.
Under the previous framework of the Petroleum Industry Act (PIA) 2021, NNPC Limited was permitted to retain a 30% “management fee” on profit oil and gas, alongside another 30% earmarked for the Frontier Exploration Fund—a vehicle used for speculative drilling in inland basins. Critics and government officials have long argued these deductions were duplicative, given that NNPC already retains 20% of its profits for working capital.
“The existing 20% profit retention is already sufficient to support NNPC’s functions,” a presidential spokesperson stated.
“The government can no longer justify large, idle cash balances being devoted to speculative exploration while the nation faces urgent fiscal priorities in security and healthcare.”
Direct Remittance and Centralized Oversight
Effective immediately, all oil and gas operators—including international oil companies (IOCs) and local contractors—must bypass NNPC and remit Royalty Oil, Tax Oil, and Profit Gas directly to the Federation Account.
To ensure the new rules are enforced, President Tinubu has established a high-level oversight committee.
Wale Edun, Minister of Finance and Coordinating Minister of the Economy
The Attorney-General of the Federation
The Ministers of Budget and Petroleum Resources (State), The Chairman of the Nigeria Revenue Service (NRS)
The order also introduces a “joint project team” to manage integrated upstream-midstream operations, designed to eliminate the bureaucratic silos that have historically hampered project execution in the Niger Delta.
This move represents a bold, if legally complex, intervention by the presidency. The PIA 2021 was intended to be the final word on the industry’s governance, yet President Tinubu’s administration has labeled parts of it “structurally anomalous.”
By using an executive order to override specific revenue clauses, the President is signaling a shift toward aggressive fiscal consolidation.
Nigeria has struggled with stagnant production and a volatile currency, making every dollar of oil revenue critical for debt sustainability.
However, the signaling of a “broader review” of the PIA may trigger unease among investors who value legal stability.
While the administration frames this as “fixing fiscal issues,” the industry will be watching closely to see if this leads to a more transparent environment or a return to heavy-handed state interference.
