Is the direct oil revenue remittance reform a defining economic move for Nigerians?

On February 13, 2026, the assistant director of information and public relations at the Ministry of Finance, Uloma Amadi, announced through a statement that President Bola Tinubu had signed an executive order suspending the collection of management and frontier exploration fees by the Nigerian National Petroleum Company (NNPC). This new order requires that taxes, royalties, and profits of oil under Production Sharing Contracts will, from henceforth, be remitted to the appropriate federal fiscal authorities.

According to the report obtained by PUNCH in September 2025, NNPC received 318.05 billion as deductions between January and August 2025 for frontier oil exploration. This deduction represents 30 percent of Production Sharing Contracts and is automatically set aside each month for exploration in inland basins. Likewise, the 30 percent rule applies to NNPC’s management fee, meaning Nigeria has lost around 60 percent of its gross oil revenue to deductions. The statement shows that the new executive order is a move to reshape cash flow and to tighten federal oversight of oil revenue administration within the sector.

Although the macroeconomic outlook shows that non-oil revenue is growing, the oil and gas sectors still remain the backbone of fiscal capacity for the Nigerian economy. The government claims that the order will improve revenue flows, increase transparency, and ensure that funds intended for national development are fully captured. Realigning oil and gas revenue to the Federation account will help close the gap that has existed for a while in monthly allocations across all tiers of government.

But the Minister of State for Finance and chairman of the Federation Account Allocation Committee (FAAC), Mrs Doris Uzoka-Anite, thinks that the projected surge in oil and gas revenue following the order could trigger exchange rate volatility and inflationary pressures if it is not managed properly. According to her, when revenues rise sharply and are fully and immediately distributed, large liquidity injections can increase inflationary pressures, complicate monetary management, and reduce the real purchasing power of allocations.

The President of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Comrade Festus Osifo, is of the opinion that the order was a direct attack on the Petroleum Industry Act (PIA) which will impact the economy negatively through the possible setbacks that the sector will have and the redundancy of workers. His argument is that removing retained revenue streams could constrain NNPC's and its contractors' operational flexibility, forcing them to take cost-cutting measures such as reducing hiring in the sector.

The former Chairman of the Major Energies Marketers Association of Nigeria (MEMAN), Adetunji Oyebanji, also acknowledged the supposed intent of the order, which was to boost the government’s revenue, but hopes that the FGN has thought it through with NNPC so it doesn’t hamper them in terms of awarding contracts and making repairs when necessary.

The fiscal move by the Presidency to boost Nigerians' public finances and reclaim revenues lost to deductions has sparked divided opinions. The federal government, using the order, seeks to clarify regulatory mandates, strengthen fiscal transparency, and enhance revenues accruing to the Federation from the oil and gas sector. But the President of PENGASSAN and the former chairman of MEMAN see it as a setback to the oil and gas industry's growth.

Nigerians have lived through many executive orders, which, more or less, have made insignificant changes to the economy and household standard of living. The boost to the economy, as claimed by the federal government, from adopting the order will depend on implementation, stakeholder engagement, and how revenue gains are managed to support productive growth and employment opportunities.