• Tinubu orders all oil revenues paid into Federation Account
• NNPC barred from withholding funds, losing management fee
• Reform aims to boost oversight, attract investment in sector

Nigerian President Bola Tinubu has signed an executive order requiring all oil and gas revenues to be paid directly into the Federation Account, the pool used to distribute income among the federal, state and local governments, the presidency said on Thursday.

Under the order, no agency will be allowed to retain or deduct funds before remitting them to the account. The move revokes provisions of the 2021 Petroleum Industry Act that had allowed the Nigerian National Petroleum Company Limited (NNPC Ltd) to withhold certain revenues before transferring them.

The presidency said NNPC Ltd will now remit 30% of profits from oil and gas production sharing and risk service contracts that had been allocated to the Frontier Exploration Fund. The state oil company will also no longer receive a 30% management fee on oil and gas revenues.

NNPC Ltd is to operate strictly as a commercial entity in line with the Petroleum Industry Act, the presidency said, adding that the measure is intended to end multiple deductions and strengthen oversight of oil revenues.

The order also applies to licence holders, contractors and operators, who must pay royalties, taxes, production shares and other government dues directly into the Federation Account. Penalties for gas flaring will likewise be paid into the account instead of the Midstream and Downstream Gas Infrastructure Fund. A committee has been set up to oversee immediate implementation.

The measure forms part of a broader reform drive launched in 2023 to restructure the oil sector and attract foreign investment. In March 2024, Tinubu signed several executive orders introducing fiscal incentives, streamlining contracting procedures and reinforcing local content requirements, according to official statements.

In May 2025, the government enacted the Upstream Petroleum Operations Cost Efficiency Incentives Order, offering tax relief linked to reductions in operating costs. The tax credits are capped at 20% of an operator’s annual tax liability and vary depending on whether projects are onshore, in shallow water or deepwater.

The government says the reforms have helped attract about $8 billion in foreign direct investment following final investment decisions on oil and gas projects. Upstream activity has also increased, with more drilling rigs deployed and additional capital committed to field developments.

The oil sector accounts for roughly 8.6% of Nigeria’s gross domestic product. The Central Bank of Nigeria projects industry growth of 6.6% in 2026, driven by average oil output estimated at 1.75 million barrels per day.

Abdel-Latif Boureima