In an update published by Premium Times, President Bola Tinubu has officially signed a transformative executive order that mandates the direct remittance of all oil and gas revenues to the Federation Account Allocation Committee (FAAC). This decisive legislative move effectively ends the long-standing practice where the Nigerian National Petroleum Company (NNPC) Limited was permitted to deduct operational costs and subsidies before remitting the balance to the government.
The presidency emphasized that this transition is rooted in Constitutional mandates to ensure that mineral resources benefit the entire federation through a more transparent and centralized fiscal process.
According to the ICIR, the order specifically targets “royalty oil, tax oil, profit oil, and profit gas,” requiring all operators under production sharing contracts to comply immediately. This policy is expected to eliminate the “duplicative structures” that have historically obscured the actual earnings from Nigeria’s vast hydrocarbon assets.
By centralizing these funds, the federal government aims to curb unauthorized spending and provide a clearer picture of the nation’s financial health to stakeholders and international observers.
Reporting by The Nation further indicates that this reform is a cornerstone of the administration’s strategy to achieve a $1 trillion economy by 2030.
Financial analysts from Vanguard noted that “this move will provide the much-needed liquidity for the three tiers of government,”
while leadership at the Federal Ministry of Finance described it as a “seed that should grow into private investor confidence.”
The policy effectively redefines the NNPC as a purely commercial entity that must seek budgetary approval for its costs rather than self-funding through revenue deductions.
Echotitbits take:
This is a bold attempt to plug the leakages that have long plagued Nigeria’s oil sector. By forcing the NNPC to remit gross revenues, the government is prioritizing fiscal transparency over administrative convenience. Watch for how the NNPC navigates its operational funding in the coming months, as this could lead to friction if budgetary releases for joint venture cash calls are delayed.
Source: Premium Times – https://www.premiumtimesng.com/news/headlines/857788-tinubu-signs-executive-order-that-slashes-nnpcs-revenue-directs-remittance-to-federation-account.html#, and February 19, 2026
Photo credit: Premium Times
