President Bola Tinubu has signed an executive order aimed at safeguarding and enhancing oil and gas revenues for the Federation, curbing wasteful spending, and eliminating duplicative structures in the sector. The directive, signed Wednesday under Section 5 of the Constitution, seeks to redirect resources for the benefit of Nigerians.
Anchored on Section 44(3) of the Constitution, which vests ownership and control of mineral resources in the Federal Government, the order restores constitutional revenue entitlements of federal, state, and local governments that were eroded by provisions of the Petroleum Industry Act (PIA) of 2021.
Under the current PIA framework, NNPC Limited retains 30% of the Federation’s oil revenues as a management fee on profit oil and gas, in addition to 20% of its profits for working capital and investments. The Federal Government considers the extra 30% fee unjustified, noting that retained earnings already cover NNPCL’s operational needs.
The order directs that revenues previously earmarked for the Frontier Exploration Fund be transferred to the Federation Account. NNPC Limited will also cease collecting the 30% management fee on profit oil and gas.
Tinubu highlighted structural concerns with NNPC Limited’s dual role as concessionaire and commercial operator, warning that the arrangement distorts competition and undermines its transition into a fully commercial entity. The order introduces immediate measures to curb leakages, enhance transparency, and reposition NNPC Limited strictly as a commercial enterprise.
The President stressed that the reforms are of urgent national importance, with implications for budgeting, debt sustainability, and economic stability. He also announced plans for a comprehensive review of the PIA in consultation with stakeholders to address fiscal and structural anomalies.
To ensure effective rollout, Tinubu approved the establishment of an Implementation Committee comprising the Ministers of Finance, Justice, Budget and National Planning, and Petroleum Resources (Oil), alongside the Chairman of the Nigeria Revenue Service, the Special Adviser on Energy, and the Director-General of the Budget Office, which will serve as the committee’s secretariat.
By Mathew Dadiya, Abuja
