Tinubu Signs Executive Order 9 to Channel Oil, Gas Revenues Directly to Federation Account

President Bola Ahmed Tinubu has signed Executive Order 9 of 2026, directing that all government entitlements from oil and gas production be paid directly into the Federation Account, in what he described as a decisive step to strengthen transparency, fiscal discipline and constitutional compliance in Nigeria’s petroleum sector.

The order, which took effect on February 13, 2026, and has now been officially gazetted, mandates that all Royalty Oil, Tax Oil, Profit Oil, Profit Gas and other government revenues under Production Sharing Contracts and related agreements be remitted straight to the Federation Account.

According to the President, the directive is aimed at ending years of excessive deductions, overlapping funds and structural distortions that have reduced the amount of revenue accruing to the federal, state and local governments.

“For too long, revenues meant for federal, state and local governments have been trapped in layers of charges and retention structures. When this happens, development slows and trust erodes,” the President stated.

End to Additional Deductions

A key component of the order is the removal of the additional 30 percent management fee and the 30 percent Frontier Exploration deduction, which previously stood between government earnings and full remittance to the Federation Account.

By eliminating these deductions, the Federal Government expects to increase net inflows into the shared revenue pool, thereby strengthening the capacity of all tiers of government to fund infrastructure, healthcare, education, security and economic stabilisation programmes.

The President stressed that the reform aligns with constitutional provisions governing revenue distribution and underscores his administration’s commitment to safeguarding public funds.

NNPC Limited to Operate as Commercial Entity

The Executive Order also reinforces the operational framework of the Nigerian National Petroleum Company Limited (NNPC Limited), directing it to function strictly as a commercial enterprise in line with existing laws.

Under the new directive, NNPC Limited is expected to operate with clearer financial boundaries, reduced duplicative deductions and enhanced oversight, in keeping with the intent of the Petroleum Industry Act.

The President noted that the era of fragmented oversight and opaque retention structures in the oil and gas sector “is over,” adding that reforms would continue to ensure the industry operates with greater efficiency and accountability.

Review of Petroleum Industry Act

Beyond the immediate financial directives, President Tinubu announced a comprehensive review of the Petroleum Industry Act to address what he described as structural and fiscal anomalies within the sector.

He also approved the establishment of an Implementation Committee tasked with ensuring effective and coordinated execution of Executive Order 9. The committee is expected to work with relevant ministries, departments and agencies to harmonise compliance and prevent revenue leakages.

Implications for States and Local Governments

Industry analysts say the move could significantly increase statutory allocations to states and local governments if fully implemented, particularly at a time when subnational governments are grappling with rising expenditure obligations.

By strengthening inflows into the Federation Account, the Federal Government aims to enhance budget stability and improve public service delivery across the country.

President Tinubu reaffirmed that the measure forms part of his broader reform agenda to protect national resources and prioritise the collective interest of Nigerians.

“Nigeria can no longer afford leakage where there should be leadership. We are safeguarding the Federation Account. We are strengthening our budget. We are acting in the national interest,” the President said.

The directive marks one of the administration’s most significant fiscal interventions in the oil and gas sector since the passage of the Petroleum Industry Act, signaling a renewed push for transparency and revenue optimisation in Africa’s largest oil-producing nation.