An executive order issued by President Bola Ahmed Tinubu that stops the deduction of management fees and the Frontier Exploration Fund by the Nigerian National Petroleum Company Limited (NNPCL) has effectively halted revenue streams that generated about N2.076 trillion between 2022 and 2025, investigations by The PUNCH show.
Under the Petroleum Industry Act (PIA), NNPCL previously deducted a 30 per cent management fee on profit oil and profit gas and contributions to a Frontier Exploration Fund before remitting revenues from oil and gas operations.
The executive order directs that all revenues due to the Federation must be remitted in full without prior deductions, in line with constitutional fiscal provisions and transparency reforms in the sector.
The order took effect on February 13, 2026, as part of broader efforts by the Presidency to align revenue remittance practices with constitutional requirements and boost funds flowing to the Federation Account and subsequently to federal, state and local governments.
Analysis of monthly earnings submitted to the Federation Account Allocation Committee shows NNPCL deducted about N20.739 billion in 2022, N695.9 billion in 2023, N452.6 billion in 2024 and N906.91 billion in 2025 under management fees and frontier fund contributions, totalling roughly N2.1 trillion over the four years.
President Tinubu’s directive states that NNPCL and other operators under production sharing contracts must pay royalty oil, tax oil, profit oil, profit gas and any other interest due to the Government of the Federation directly into the Federation Account.
It also prioritises constitutional fiscal provisions over revenue deductions previously permitted under the PIA.
A presidential implementation committee has been directed to oversee and coordinate the effective implementation of the revenue remittance order.
The Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, said the executive order was intended to safeguard and enhance oil and gas revenues for the Federation, curb wasteful spending and eliminate duplicative structures.
He said the objective is to ensure oil revenues arrive in the Federation Account first, before being disbursed to the three tiers of government.
State governments and fiscal transparency advocates have welcomed the order, saying it will boost distributable revenues and strengthen accountability.
The South-South Governors Forum described the directive as a critical shift towards restoring constitutional integrity in Nigeria’s petroleum sector.
Industry players and legal analysts, including unions representing petroleum workers, have raised concerns about the impact of removing long-established funding mechanisms on operational financing, frontier exploration and statutory obligations previously funded through deductions.
The executive order places attention on the balance between constitutional supremacy and industry-specific legislation as Nigeria continues reforms of its oil and gas revenue framework.
