President Bola Tinubu has signed a new Executive Order aimed at strengthening the remittance of oil and gas revenues to the Federation Account, reducing waste, dismantling overlapping structures in the sector, and redirecting resources toward national development priorities.
The President’s Special Adviser on Information and Strategy, Bayo Onanuga, disclosed the development in a statement on Wednesday. He noted that the directive was issued pursuant to Section 5 of the Constitution of the Federal Republic of Nigeria (as amended).
According to the report by Daily Post Nigeria, the Executive Order is grounded in Section 44(3) of the Constitution, which grants the Federal Government ownership and control over all minerals, mineral oils, and natural gas found in Nigeria, including those in its territorial waters and Exclusive Economic Zone.
The directive is designed to restore the constitutional revenue allocations due to Federal, State, and Local Governments, which were reportedly altered following the enactment of the Petroleum Industry Act in 2021.
The PIA introduced legal and structural provisions that, according to the statement, have led to significant revenue deductions through various charges and fees. Under the current framework, NNPC Limited retains 30 percent of the Federation’s oil revenues as a management fee on Profit Oil and Profit Gas derived from Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts.
The Federal Government maintains that this additional 30 percent management fee is unnecessary, considering that NNPC Limited already retains 20 percent earnings deemed sufficient to carry out its contractual responsibilities.
In addition, NNPC Limited retains another 30 percent of oil and profit gas revenues under the same contracts for the Frontier Exploration Fund, as provided in Sections 9(4) and (5) of the PIA. The statement argued that dedicating such a large fund to speculative exploration could result in idle cash accumulation and inefficient spending, especially at a time when resources are urgently needed for security, education, healthcare, and energy transition initiatives.
The statement also referenced the Midstream and Downstream Gas Infrastructure Fund (MDGIF) established under Section 52(7)(d) of the PIA and funded through gas flaring penalties under Section 104. The fund is intended to support environmental remediation and relief for host communities affected by gas flaring.
However, it noted that Section 103 of the PIA already created a separate Environmental Remediation Fund, administered by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), to rehabilitate communities impacted by upstream petroleum operations, including gas flaring. The existence of both funds, the statement suggested, results in duplication, as lessees are already mandated to contribute to the remediation fund under Section 103.
