Tinubu signs executive order to halt NNPC Ltd deductions
By Matthew Denis
In a major fiscal overhaul, President Bola Ahmed Tinubu has signed a new Executive Order designed to eliminate unconstitutional deductions and ensure the direct remittance of oil and gas revenues to the Federation Account.
Gazetted on February 13, 2026, the directive effectively strips the NNPCL of billions in previously retained fees and targets structural leakages within the Petroleum Industry Act (PIA) 2021.
The order, announced on Wednesday, February 18, 2026, introduces aggressive measures to restore constitutional revenue flows to the three tiers of government.
A statement from the Federal Ministry of Finance, signed by Amadi Uloma Nneka, confirmed that the directive was necessitated by a sustained decline in Federation inflows, which occurred despite stable production and favorable market conditions.
The Executive Order implements several immediate changes to the nation’s petroleum fiscal framework aimed at promoting transparency and fiscal discipline.
A primary focus is the suspension of the 30% management fee on Profit Oil and Profit Gas derived from Production Sharing Contracts, which the NNPCL previously retained.
The Presidency deemed this additional fee unjustified, noting that the company’s existing 20% profit retention for working capital and investments is sufficient for its commercial operations as a limited liability entity.
The order further abolishes the 30% retention of profit oil and gas for the Frontier Exploration Fund under Sections 9(4) and (5) of the PIA. All such funds are now mandated for direct transfer to the Federation Account, preventing the accumulation of large idle balances for speculative exploration.
In a similar vein, the payment of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF) has been suspended, with those proceeds redirected to the Federation Account to ensure full compliance with public procurement laws.
To resolve long-standing friction within the sector and improve accountability, the order clarifies the distinct mandates of the NUPRC (Upstream) and the NMDPRA (Midstream/Downstream). Effective immediately, all contractors and operators under production sharing arrangements are required to pay Royalty Oil, Tax Oil, Profit Oil, and Profit Gas directly to the appropriate fiscal authorities, bypassing NNPCL as a middleman.
An implementation committee, led by the Minister of Finance and Coordinating Minister of the Economy, has been established to oversee these reforms and harmonize security and operational strategies.
While the Executive Order takes immediate effect as a corrective measure, the Presidency indicated plans to work with the National Assembly to institutionalize these changes through formal amendments to the PIA.
This move is expected to significantly boost the liquidity of the Federation Account Allocation Committee (FAAC) and provide the government with the necessary resources to fund critical national priorities.