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President Bola Tinubu has explained why he signed a presidential executive order to restore oil and gas revenues to the Federation Account.
In a message to Nigerians published on his X account on Wednesday, Tinubu explained his reasoning.
“For too long, excessive deductions, overlapping funds, and structural distortions in the oil and gas sector have weakened remittances to the Federation Account,” Tinubu said.
“When revenues meant for federal, state, and local governments are trapped in layers of charges and retention mechanisms, development suffers. That must end.”
With Order 9 of 2026 (Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity, 2026), which has now been gazetted, all royalty oil, tax oil, profit oil, profit gas, and other government entitlements under production sharing and related contracts will now be paid directly into the Federation Account.
It eliminates the 30 percent management fee and the 30 percent Frontier Exploration deduction that previously reduced national revenue.
President Tinubu explained the rationale for the order, saying, “Our objective is transparency, accountability, and full constitutional compliance.
“Oil and gas revenues must serve the Nigerian people first and this reform is about fairness and fiscal responsibility. As we strengthen national security, invest in education, expand healthcare, stabilise the economy, and advance our energy transition, every legitimate naira due to the Federation must be protected.”
He added that NNPC Limited will now operate strictly as a commercial enterprise, ending the era of “duplicative deductions and fragmented oversight is over.”
He also announced a comprehensive review of the Petroleum Industry Act to address structural and fiscal anomalies.
“Our administration will also undertake a comprehensive review of the Petroleum Industry Act to address structural and fiscal anomalies that weaken national revenue,” Tinubu stated.
The establishment of an Implementation Committee to supervise and coordinate the Executive Order was authorised by the President in order to guarantee its execution.
“Nigeria can no longer afford leakage where there should be leadership. We are safeguarding the Federation Account.
“We are strengthening our budget. We are acting in the national interest. This was my promise to Nigerians when I asked for this job. Nigeria First. I thank you all.”
