In a major shake-up of Nigeria’s oil revenue structure, President Bola Tinubu has signed a new executive order ending the long-standing 30 percent management fee previously retained by Nigerian National Petroleum Company Limited on profit oil and gas earnings.
The directive, which took effect from February 13, 2026, mandates that all such revenues be paid directly into the Federation Account, a move the Presidency says is aimed at boosting national income and eliminating what it described as wasteful deductions.
According to a State House statement released by presidential spokesman Bayo Onanuga, the decision is rooted in constitutional provisions that place ownership and control of mineral resources firmly in the hands of the Federal Government.
Why The Order Was Issued
SUNTV Global Channel gathered that under the Petroleum Industry Act framework, NNPC Limited had been retaining 30 percent of profit oil and gas from various contractual arrangements, including production sharing and risk service contracts. The company also keeps 20 percent of its profits for operational costs and future investments.
However, the Federal Government now considers the extra 30 percent retention unjustifiable, arguing that the existing 20 percent profit allocation already covers the company’s operational needs.
What Changes Immediately
The executive order directs that all contractors and operators in Nigeria’s oil and gas sector must now pay royalty oil, tax oil, profit oil, profit gas, and any related government entitlements straight into the Federation Account without passing through NNPC Limited.
Officials say the reform is designed to:
- Increase revenue transparency
- Strengthen national budgeting capacity
- Reduce public debt pressure
- Eliminate overlapping deductions in the petroleum sector
Implementation And Next Steps
An inter-ministerial committee has been set up to oversee the enforcement of the directive and ensure a smooth transition to the new payment structure.
The Tinubu administration also confirmed plans to review the Petroleum Industry Act comprehensively, with the goal of addressing fiscal loopholes and structural challenges affecting Nigeria’s oil revenue system.
Government sources describe the move as urgent and critical to stabilising the economy and ensuring that more oil wealth directly benefits the Nigerian people.
