Nigerian President Bola Tinubu has signed an executive order directing a sweeping realignment of the country’s oil and gas revenue flows, targeting what officials describe as unconstitutional off-budget deductions that have starved the federal government of funds despite improving crude output and favorable market conditions.
The order, announced by Mohammed Manga, director of information and public relations, takes immediate effect and represents one of the most significant interventions in Nigeria’s petroleum fiscal system since the Petroleum Industry Act was enacted in 2021.
At its core, the directive instructs that taxes, royalties, and profit oil under Production Sharing Contracts be remitted directly by contractors to the appropriate fiscal authorities bypassing the Nigerian National Petroleum Company Limited, (NNPC) while suspending the state oil company’s collection of management fees and frontier exploration levies.
The order also halts the channeling of gas flare penalties into the Midstream Gas Infrastructure Fund, redirecting those flows back toward the Federation Account.
“The fundamental purpose of the nation’s oil and gas sector, including the national oil company, is to convert hydrocarbon resources into sustainable revenues, investment, and economic activity that benefit the broader economy,” the presidency said in a statement accompanying the order.
