Tinubu Signs Executive Order Redirecting Oil and Gas Revenues Directly to Federation Account

Urbanscoopnews reporting

Abuja, Nigeria — February 19, 2026 — President Bola Ahmed Tinubu has signed a far-reaching executive order restructuring the remittance framework for Nigeria’s oil and gas revenues, directing that all government entitlements under production sharing and related contracts be paid directly into the Federation Account.

The directive, titled Order 9 of 2026 (Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity, 2026), took effect on February 13, 2026, following its official gazetting. The order mandates that all Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and other government entitlements arising from Production Sharing Contracts and similar arrangements be remitted without intermediary deductions into the Federation Account for distribution to the federal, state, and local governments.

In announcing the reform, the President stated that excessive deductions, overlapping funds, and retention mechanisms within the oil and gas value chain have weakened statutory remittances and constrained public sector financing. He said revenues intended for the Federation Account had for years been trapped in layers of charges and structural distortions, reducing the funds available for development priorities.

A key feature of the order is the elimination of the additional 30 percent management fee and the 30 percent Frontier Exploration deduction, measures the administration described as impediments to full revenue realisation. By removing these deductions, the government aims to strengthen transparency, enhance accountability, and ensure constitutional compliance in the management of petroleum revenues.

The reform also reinforces the commercial orientation of Nigerian National Petroleum Company Limited, directing that the company operate strictly as a profit-driven enterprise in line with its mandate under the Petroleum Industry Act. The administration signaled the end of what it described as duplicative deductions and fragmented oversight in the sector, positioning the executive order as a corrective step toward fiscal discipline.

An Implementation Committee has been approved to oversee coordinated execution of the directive, while the government also announced plans for a comprehensive review of the Petroleum Industry Act to address structural and fiscal anomalies that may weaken national revenue flows.

Oil and gas revenues remain central to Nigeria’s public finance architecture, forming a substantial share of allocations distributed through the Federation Account. Policy analysts suggest that direct remittance of entitlements could improve revenue transparency, strengthen budget performance, and bolster intergovernmental fiscal stability if effectively implemented.

The administration framed the order within its broader economic agenda, which includes strengthening national security, expanding investment in education and healthcare, stabilising macroeconomic conditions, and advancing Nigeria’s energy transition objectives. By centralising revenue flows and curbing discretionary deductions, the government says it is safeguarding public funds and reinforcing its commitment to fiscal responsibility.

As implementation begins, stakeholders across government, industry, and civil society are expected to closely monitor the order’s practical impact on revenue management, federal allocations, and investor confidence in Africa’s largest oil-producing economy.