President Bola Tinubu has signed an Executive Order terminating the 30% management fee previously retained by the Nigerian National Petroleum Company Limited (NNPC Ltd) on profit oil and profit gas revenues, directing that such funds be paid directly into the Federation Account.
The order, dated February 13, 2026, and announced in a State House press release on Wednesday, February 18, 2026, by Special Adviser to the President on Information and Strategy, Bayo Onanuga, aims to safeguard and maximise oil and gas revenues accruing to the federation, eliminate wasteful spending, remove duplicative structures in the sector, and redirect resources for the benefit of all Nigerians.
The President invoked Section 5 of the Constitution (as amended) to issue the order, anchoring it on Section 44(3), which vests ownership and control of all minerals, mineral oils, and natural gas in the Government of the Federation.
Under the existing Petroleum Industry Act (PIA) framework, NNPC Ltd has been retaining 30% of the federation’s share of profit oil and profit gas from Production Sharing Contracts (PSCs), Profit Sharing Contracts, and Risk Service Contracts as a management fee. In addition, the company retains 20% of its profits for working capital and future investments.
The Federal Government stated that “given the existing 20% retention, the additional 30% management fee is considered unjustified,” as the retained earnings are already sufficient to support NNPC Ltd’s functions under the contracts.
Key provisions of the Executive Order include:
– NNPC Ltd is no longer entitled to the 30% management fee on profit oil and profit gas revenues; these must now go directly to the Federation Account.
– All operators and contractors of oil and gas assets under production sharing contracts are required, effective February 13, 2026, to remit Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and any other government interest directly to the Federation Account.
The Presidency explained that the reform addresses “overlapping and redundant provisions across relevant laws and regulatory instruments under the PIA framework and NNPC Ltd’s governing structure,” with the goal of eliminating “unjustified multiple layers of deductions that erode revenues that ought to accrue to the Federation Account.”
President Tinubu described the changes as “of urgent national importance” due to their implications for national budgeting, debt sustainability, economic stability, and the overall well-being of Nigerians.
An implementation committee comprising key ministers and senior officials has been set up to ensure smooth and coordinated execution of the order.
The administration also signalled plans for a comprehensive review of the Petroleum Industry Act in consultation with stakeholders to correct identified fiscal and structural anomalies in the sector.
