Tinubu’s Executive Order on Oil Revenues Set to Strengthen Nigeria’s Fiscal Position
By Rashidat Olushola Okunlade
President Bola Ahmed Tinubu’s Executive Order No. 9 of 2026 mandating the direct remittance of oil and gas revenues into the Federation Account is being widely regarded as a landmark fiscal reform with the potential to improve Nigeria’s fragile balance sheet.
Signed on February 13, the directive requires that royalty oil, tax oil, profit oil, profit gas, and proceeds from production sharing, profit sharing, and risk service contracts be paid directly into the Federation Account.
The order effectively suspends certain retention provisions under the Petroleum Industry Act, including the 30 per cent management fee on profit oil and gas, as well as the Frontier Exploration Fund allocation.
Fiscal authorities say the reform comes at a critical time, as Nigeria faces rising debt servicing obligations, infrastructure gaps, and broader macroeconomic challenges. By eliminating layered deductions and enforcing full remittance, the policy is expected to significantly boost government revenues.
Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mohammed Bello Shehu, described the directive as “a bold, constitutionally grounded, and fiscally transformative intervention” designed to restore transparency, plug revenue leakages, and strengthen the earnings of all three tiers of government.
According to RMAFC, previous provisions within the PIA allowed substantial deductions from oil revenues before they reached the Federation Account. These included management fees and allocations for frontier exploration retained at the upstream level.
Data submitted to the Federation Account Allocation Committee (FAAC) for 2025 show that approximately ₦906.91 billion was projected for management fees and frontier exploration, while oil and gas royalties amounting to ₦7.55 trillion, alongside ₦611.42 billion in gas flaring penalties, were subject to fragmented remittance processes.
Based on these figures, analysts estimate that up to ₦14.57 trillion in additional revenue could accrue to federal, state, and local governments if the directive is fully implemented.
RMAFC noted that the reform would not only improve transparency but also enhance predictability in government cash flows.
Shehu added that the order reinforces constitutional provisions by eliminating duplicative deductions and ensuring that all revenues due to the Federation are remitted in full.
Central to the reform is a recalibration of the fiscal relationship between the Federation and the Nigerian National Petroleum Company Limited (NNPCL).
Under the PIA framework, the national oil company retained significant portions of upstream revenues before remitting the balance, a system critics argued reduced the Federation’s effective share of profit oil under production sharing contracts.
Although NNPCL had pledged to remit ₦3.25 trillion in interim dividends in 2025, FAAC records indicate that no such payments were made during the period.
Industry stakeholders have welcomed the policy shift.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) described the directive as a courageous reform that would enhance accountability and enforce commercial discipline within the oil sector.
Its National President, Dr. Billy Gillis-Harry, noted that centralised remittance would strengthen public oversight and boost investor confidence.
Economic analysts further observe that beyond transparency, the reform could improve Nigeria’s debt servicing capacity and support more effective budget planning across subnational governments. With global oil prices remaining volatile, ensuring full statutory remittances has become essential to stabilising public finances.
However, experts caution that the success of the Executive Order will depend on effective implementation, noting that further legal and legislative adjustments may be required to fully align the PIA with constitutional revenue provisions.
For now, fiscal authorities remain optimistic that the directive signals a decisive step toward restoring credibility in Nigeria’s petroleum revenue management and reinforcing the nation’s fiscal stability.
