An executive order issued by President Bola Tinubu directing the Nigerian National Petroleum Company Limited to remit all revenues in full to the Federation Account has effectively stopped deductions that totalled about N2.1tn between 2022 and 2025.
An analysis of earnings presented to the Federation Account Allocation Committee showed that the national oil company retained N20.739bn in 2022, N695.9bn in 2023, N452.6bn in 2024 and N906.91bn in 2025 through management fees and the Frontier Exploration Fund. The directive now requires that such revenues be paid into the Federation Account before any operational expenses are considered.
The order prioritises constitutional fiscal provisions over certain funding arrangements under the Petroleum Industry Act, effectively halting automatic deductions from oil and gas earnings. It mandates that operational costs must be processed through approved budgetary channels rather than being removed at source.
State governments and transparency advocates have welcomed the move, arguing that it will boost distributable revenue and enhance accountability. They contend that if the deductions had not been made, the federation would have had stronger fiscal buffers over the four-year period.
However, industry stakeholders and some energy experts have expressed concern that the policy shift could disrupt production sharing contract operations and frontier exploration activities. They warn that abrupt changes to established funding mechanisms may create uncertainty for investors and complicate ongoing deepwater projects.
Labour groups have also called for clarity on implementation to avoid disruptions to production and job security. Meanwhile, a presidential implementation committee has been tasked with overseeing compliance, as debate continues over how to balance fiscal reforms with sustained investment in the oil and gas sector.
