The Federal Government has finally removed the power of the Nigerian National Petroleum Company Limited (NNPCL) to collect the 30 per cent management fee and the 30 per cent Frontier Exploration Fund (FEF) deductions from profit oil and profit gas under Production Sharing Contracts (PSCs), with immediate effect.
It has, however, begun implementing Executive Order 9 of 2026, which requires the direct remittance of oil revenues to the Federation Account Allocation Committee (FAAC).
This was even as the Nigeria Governors’ Forum (NGF) okayed the direct remittance of oil and gas revenues into the Federation Account, saying the move was crucial to enhancing fiscal transparency, predictability and constitutional alignment across all tiers of government.
Stating this in Abuja yesterday, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who doubles as the Chairman of the Implementation Committee, noted that the action was in line with the President’s directive.
This followed President Tinubu’s directive on remittances to FAAC and the inaugural meeting of the implementation committee for the executive order.
“The NNPCL shall cease, with immediate effect, the collection of the 30 per cent management fee and FEF deductions from profit oil and profit gas under PSCs.”
The Federal Government also stopped the Midstream and Downstream Gas Infrastructure Fund (MDGIF) from warehousing all remittances from gas flare penalties with immediate effect.
EDUN said the committee reaffirmed the President’s directive that revenues accruing to the federation from petroleum operations must be managed in line with constitutional provisions and in a way that safeguards funds meant for the three tiers of government.
“In line with the President’s directive, NNPCL shall cease, with immediate effect, the collection of the 30 per cent management fee and the 30 per cent FEF deductions from profit oil and profit gas under PSCs.
“Additionally, all remittances of gas flare penalties into the MDGIF are suspended with immediate effect, in line with the Executive Order,” the statement reads.
On Section 2(3) of the order, which provides for direct payments by contractors into the federation account, the minister said the committee agreed that the transition must respect existing contractual and financing arrangements while maintaining investor confidence.
“For this reason, the committee approved a defined transition period for the operationalisation of direct payments by contractors of profit oil, royalty oil, and tax oil into the Federation Account.
“Until the committee issues detailed guidelines, contractors will continue to remit under the current process. During the transition period, the Committee will issue clear, standardised guidance to ensure an orderly changeover,” the statement added.
NGF, in a statement issued on Monday by its Director of Media and Strategic Communications, Yunusa Abdullahi, noted that the forum’s focus was on how the reforms would improve transparency, predictability and constitutional alignment of Federation Account inflows at all levels of government.
The move generated mixed reactions, with some praising the initiative and others criticising it.