According to a report by the Punch on Thursday, February 26, 2026, President Bola Ahmed Tinubu has issued an executive order stopping the deduction of management fees and Frontier Exploration Fund contributions by the Nigerian National Petroleum Company Limited before remitting revenues to the Federation Account. The directive effectively blocks about N2.1tn retained by the national oil firm between 2022 and 2025. The order mandates that all oil and gas revenues be paid into the Federation Account in full, in line with constitutional provisions, before any operational expenses are considered.
Data submitted to the Federation Account Allocation Committee show that NNPC received N20.739bn from such deductions in 2022, N695.9bn in 2023, N452.6bn in 2024, and N906.91bn in 2025. The figures reflect sharp year-on-year fluctuations, with 2023 recording a dramatic increase over 2022, followed by a dip in 2024 and another surge in 2025. Monthly records across the period also revealed wide swings in retained earnings, underscoring the volatility of oil sector revenues.
The President’s directive prioritises constitutional fiscal rules over funding mechanisms provided under the Petroleum Industry Act. It specifically halts automatic deductions for management fees and frontier exploration prior to revenue remittance. A presidential implementation committee has been set up to oversee compliance, with breaches to be treated as violations of lawful executive orders and fiscal provisions.
While state governments and transparency advocates welcomed the move as a boost to distributable revenue and accountability, some industry stakeholders warned of possible tensions between the executive order and the Petroleum Industry Act. Labour unions, including the Petroleum and Natural Gas Senior Staff Association of Nigeria, called for clarity to ensure that production levels and jobs are not jeopardised.
An NNPC official, who spoke anonymously, criticised the directive, saying, “It is an extremely bad situation and not well thought out.” The official argued that deepwater assets operate under production sharing contracts where royalties and taxes are lifted in barrels rather than cash, with proceeds remitted to the Federation Account after sales. According to him, altering the process could disrupt oversight of 39 production sharing contract sites and affect 400 to 500 personnel dedicated to those operations.
The official also raised concerns about crude-backed loans and investor confidence, noting that some production barrels are tied to loan repayments secured in recent years. He warned that sudden policy changes could create uncertainty for lenders and international oil companies involved in ongoing deepwater projects. Supporters of the directive, however, insist that frontier exploration should be financed through the national budget or private investment rather than automatic deductions from federation revenues.See_More…