In a major shake-up of Nigeria’s oil and gas fiscal regime, the Federal Government has officially commenced the implementation of Executive Order 9 of 2026, aimed at plugging revenue leakages and reclaiming billions of dollars in petroleum earnings for the Federation Account.
The move, sanctioned by President Bola Ahmed Tinubu, effectively strips the Nigerian National Petroleum Company Limited (NNPCL) of its long-standing authority to deduct massive administrative and exploration fees before remitting funds to the national coffers.
End of 60% Deductions and Gas Penalties
Following the inaugural meeting of the Implementation Committee on February 26, 2026, the government announced that NNPC Limited must cease the collection of the 30% management fee and the 30% frontier exploration fund deductions from profit oil and gas under Production Sharing Contracts (PSCs) with immediate effect.
Furthermore, the committee has suspended all remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF), redirecting these flows to ensure fiscal stability across the three tiers of government.
Direct Payments and Investor Confidence
A central pillar of the new order is the transition to direct payments by contractors into the Federation Account, bypassing intermediary hands to ensure transparency. However, to maintain market stability, the committee has approved a defined transition period to protect existing contractual and financing arrangements.
“The committee is committed to upholding constitutional principles and protecting revenues accruable to the Federation,” stated Mr. Wale Edun, the Honourable Minister of Finance and Coordinating Minister of the Economy. “This transition will be implemented in a manner that respects existing arrangements and maintains investor confidence while ensuring that Nigeria’s petroleum resources deliver tangible benefits to its citizens.”
Technical Subcommittee to Review PIA
To oversee the granular details of this shift, a Technical Subcommittee has been established. This body is tasked with two critical mandates to be completed within a rapid timeframe guideline development by creating the framework for direct remittance within three weeks, legislative review to initiate a comprehensive review of the Petroleum Industry Act (PIA) to fix structural and fiscal anomalies that have historically weakened Federation revenues.
The subcommittee will be chaired by the Special Adviser to the President on Energy and features a high-powered team including the Solicitor-General of the Federation, the Chairman of the Nigeria Revenue Service (NRS), and the Chairman of the Forum of Commissioners of Finance.
A New Era of Fiscal Accountability
The implementation of Executive Order 9 signals a decisive end to the era of opaque deductions and marks a shift toward a centralized revenue model. By reclaiming these funds, the Federal Government aims to bolster the fiscal health of States and Local Governments, ensuring that oil wealth is reflected in the national budget rather than corporate balance sheets.
The Committee expressed its appreciation for the cooperation of industry stakeholders, noting that these reforms are essential to ensuring the Petroleum Industry Act (PIA) serves the collective interest of all Nigerians.
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