President Bola Ahmed Tinubu has issued an Executive Order ending the 30 per cent management fee previously retained by the Nigerian National Petroleum Company Limited (NNPCL) on profit oil and profit gas, directing that the funds be paid directly into the Federation Account.
In a statement signed by his Special Adviser on Information and Strategy, Bayo Onanuga, the President said the move is aimed at “safeguard[ing] and enhance[ing] oil and gas revenues for the Federation, curb wasteful spending, eliminate duplicative structures in this critical sector of the national economy, and redirect resources for the benefit of the Nigerian people.”
The Executive Order, signed pursuant to Section 5 of the Constitution and anchored on Section 44(3), which vests ownership of all minerals and natural gas in the federal government, marks a major reform of the petroleum sector.
Under the existing Petroleum Industry Act (PIA) framework, NNPCL retained 30 per cent of profit oil and profit gas as a management fee from Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts, in addition to keeping 20 per cent of its profits for working capital and future investments. The government said the extra 30 per cent retention was no longer justified.
The gazetted order mandates that “all operators/contractors of oil and gas assets held under a production sharing contract shall… pay Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and any other interest… directly to the Federation Account” from February 13, 2026.
The Presidency said the order is intended to eliminate “unjustified multiple layers of deductions” under NNPCL’s structure and the PIA framework. President Tinubu described the reforms as “of urgent national importance” for national budgeting, debt sustainability, and economic stability.
An implementation committee of key ministers and senior officials has been constituted to ensure the order’s effective execution, while the administration plans a comprehensive review of the Petroleum Industry Act with stakeholders to address fiscal and structural gaps.
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