President Bola Tinubu has suspended the collection of management and frontier exploration fees by the Nigerian National Petroleum Company Limited (NNPCL) as part of a sweeping Executive Order aimed at safeguarding oil and gas revenues due to the Federation.
The directive, announced in a statement yesterday by the Assistant Director of Information and Public Relations at the Federal Ministry of Finance, Uloma Amadi, also orders the direct remittance of taxes, royalties, and profit oil under Production Sharing Contracts to the appropriate fiscal authorities, effectively blocking deductions at source.
According to the ministry, the President signed the Executive Order last week to realign oil and gas revenue flows with constitutional provisions and address revenue leakages that have weakened inflows into the Federation Account.
The statement read in part: “Last week, His Excellency President Bola Tinubu signed an Executive Order aimed at realigning oil and gas revenue flows with constitutional requirements. The Order seeks to strengthen fiscal transparency, clarify regulatory mandates, and enhance revenues accruing to the Federation from the oil and gas sector”.
The new order suspends NNPC’s collection of management and frontier exploration fees, halts payments of gas flare penalties into the Midstream Gas Infrastructure Fund, and clarifies the delineation of responsibilities between the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA). It also establishes an inter-agency implementation committee, chaired by the Minister of Finance and Coordinating Minister for the Economy, to ensure seamless execution.
The Ministry explained that the action reinforces provisions of the 1999 Constitution (as amended), which vests ownership of mineral resources in the Federation and mandates that all revenues derived from them be paid into the Federation Account. It added that the order specifically addresses fiscal and structural arrangements introduced under the Petroleum Industry Act (PIA) 2021 that have resulted in off-budget allocations and deductions from Federation revenues.
The Government said the measure had become urgent, in view of declining oil and gas revenue inflows into the Federation Account despite improvements in production and favourable market conditions. “This shortfall has constrained the government’s capacity to meet budgetary obligations and to finance critical public investments in education, healthcare, and infrastructure”, the ministry stated.
The Ministry stressed that the oil and gas sector must operate in a way that delivers transparent, constitutionally compliant revenue flows.
“The fundamental purpose of the nation’s oil and gas sector, including the national oil company, is to convert hydrocarbon resources into sustainable revenues, investment, and economic activity that benefit the broader economy. Achieving this objective requires revenue flows that are transparent, constitutionally compliant, and fully accounted for”, it stated.
The move signals a tightening of federal oversight of oil revenue administration and could reshape cash flow structures within the sector, particularly regarding NNPCL’s cost recovery and funding mechanisms under the Petroleum Industry Act.
Recall that earlier in September 2025, the Nigerian National Petroleum Company Limited received ₦318.05bn between January and August 2025 for frontier oil exploration. This was according to documents from the September 2025 Federation Account Allocation Committee meeting. The deductions represent 30% of Production Sharing Contract profits, which are automatically set aside each month for exploration in inland basins.
The same 30% rule also applied to NNPC’s management fees, which mirrored the frontier deductions exactly.
The Director-General of the Budget Office of the Federation, Tanimu Yakubu, earlier said Nigeria had lost nearly 60% of its gross oil revenue to deductions under the PIA 2022, which allocates 30% to the NNPC as management fees, and another 30% to the Frontier Exploration Fund. He said he had begun moves in the 10th National Assembly to amend the PIA on recovering part of the lost revenue.
Tinubu had earlier called for a reassessment of NNPC’s 30% management fee and 30 percent frontier exploration deduction under the Petroleum Industry Act. He tasked the Economic Management Team, chaired by the Minister of Finance, Wale Edun, to present actionable recommendations to the FEC on the optimal way forward.
