Tinubu’s oil revenue order moves to implementation, could unlock ₦14.57tn

Based on current revenue projections, as much as ₦14.57 trillion in additional allocations could flow to the federal, state and local governments if President Bola Ahmed Tinubu’s Executive Order No. 9 of 2026 on oil and gas revenue remittances is fully implemented — a potential windfall that could significantly ease pressure on Nigeria’s strained public finances.

Momentum behind the reform strengthened on Monday as the Federal Ministry of Finance announced that the Implementation Committee for Executive Order 9 held its inaugural meeting in Abuja, formally kick-starting the operational phase of the directive.

In a press statement signed by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, the Committee reaffirmed the President’s directive that petroleum revenues accruing to the Federation must be handled in a manner that upholds constitutional principles, protects revenues due to the Federation, and supports fiscal stability across the three tiers of government.

The Committee confirmed that Nigerian National Petroleum Company Limited (NNPC Limited) shall cease, with immediate effect, the collection of the 30 per cent management fee and the 30 per cent Frontier Exploration Fund deductions from profit oil and profit gas under Production Sharing Contracts (PSCs).

Additionally, all remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF) have been suspended with immediate effect, in line with the Executive Order.

The estimate of ₦14.57 trillion is derived from 2025 revenue inflow data submitted to the Federation Account Allocation Committee (FAAC). The figure reflects funds previously subject to layered deductions and retention mechanisms under the Petroleum Industry Act (PIA).

An analysis of 2025 remittance projections shows that about ₦906.91 billion was expected to be retained as management fees and frontier exploration allocations. Oil and gas royalties totalling ₦7.55 trillion and gas flaring penalties of ₦611.42 billion were also subject to complex remittance structures prior to the new directive.

By centralising these inflows into the Federation Account, fiscal authorities say the reform could significantly improve transparency and revenue availability at a time when Nigeria faces mounting debt service obligations and funding gaps in infrastructure, healthcare, security and education.

However, the Implementation Committee clarified that the transition to direct payments by contractors into the Federation Account will be phased to preserve contractual and financing stability.

With respect to Section 2(3) of the Executive Order — which mandates direct payment of profit oil, royalty oil and tax oil into the Federation Account — the Committee approved a defined transition period. Until detailed operational guidelines are issued, contractors will continue remitting under the current process.

During the transition window, the Committee will issue clear, standardised guidance to ensure an orderly changeover and maintain investor confidence.

To drive the process, a Technical Subcommittee has been established to develop detailed transition guidelines within three weeks and commence a review of the PIA to address structural and fiscal anomalies that weaken Federation revenues.

The Subcommittee will be led by the Special Adviser to the President on Energy and includes the Solicitor-General of the Federation and Permanent Secretary of the Federal Ministry of Justice, the Chairman of the Nigeria Revenue Service, the Chairman of the Forum of Commissioners of Finance, and representatives of the Minister of State for Petroleum Resources (Oil), with secretarial support from the Budget Office of the Federation.

At the centre of the reform is a recalibration of the fiscal relationship between the Federation and NNPC Limited. Under the PIA framework, NNPC retained significant portions of upstream revenues before remitting balances to FAAC, reducing the Federation’s effective share of PSC profit oil to 40 per cent.

Although NNPC pledged to remit ₦3.25 trillion in interim dividends in 2025, FAAC records indicated that no dividend payments were made during the year, intensifying scrutiny of the dividend-based revenue model introduced by the PIA.

Industry operators have welcomed the Executive Order. The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) said the directive would enhance accountability and strengthen commercial discipline within NNPC Limited. Its national president, Dr Billy Gillis-Harry, described the move as courageous and reform-driven, noting that predictable inflows into the Federation Account would improve macroeconomic stability and investor confidence.

Economists say the potential ₦14.57 trillion revenue boost could materially improve Nigeria’s balance sheet by enhancing debt servicing capacity, stabilising monthly FAAC distributions and reducing fiscal uncertainty for subnational governments.

However, analysts caution that the durability of the reform will depend on strict enforcement and possible legislative amendments to permanently align the PIA with constitutional revenue remittance provisions.

For now, with implementation formally underway and immediate suspensions already in force, Executive Order 9 represents one of the most consequential fiscal recalibrations in Nigeria’s oil sector since the PIA’s enactment — and, if fully realised, could provide a critical lifeline to government finances.