Nigeria’s Federal Government Launches New Oil and Gas Revenue Strategy
The Federal Government of Nigeria has initiated its implementation of the Oil and Gas Revenues Executive Order 09. This new directive aims to strengthen the management of petroleum revenue and ensure better financial flows for the country.
Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, made the announcement yesterday. He stated that a Technical Committee has been established to oversee the allocation of these revenues to the Federation Account, fully aligning with the stipulations set forth in the Executive Order.
The first meeting of the Implementation Committee was convened on February 26, 2026, signaling a proactive approach to the directive issued by President Bola Ahmed Tinubu. This executive order focuses on safeguarding federal revenues and streamlining the management of revenue from petroleum operations.
Edun’s statement emphasized the importance of adhering to constitutional principles while managing resources. He confirmed that the revenues generated from the oil sector must be nurtured in a way that upholds fiscal stability for all levels of government, ensuring that Nigeria’s financial framework remains robust.
In a notable shift, the Nigeria National Petroleum Corporation Limited (NNPC) has been instructed to immediately halt the collection of a 30% management fee and related deductions from profit oil and profit gas derived from Production Sharing Contracts (PSCs). This move is expected to redirect funds into the Federation Account, enhancing overall revenue performance.
Additionally, starting right away, all gas flare penalties normally allocated to the Midstream and Downstream Gas Infrastructure Fund (MDGIF) have been suspended. This alteration is part of the broader suite of changes outlined in the Executive Order.
The Implementation Committee discussed critical adjustments, particularly concerning direct payment systems for contractors. Edun pointed out that while transitioning to direct payments into the Federation Account is essential, it must be handled carefully to respect existing contracts and maintain investor trust.
To facilitate this transition, the Committee has established a defined timeframe for operational shifts, ensuring that economic stability remains in focus during the changeover. Until specific guidelines are issued, contractors will continue with the current payment processes. The Committee is committed to providing clear, standardized instructions to ensure a smooth transition.
Part of the strategy includes the formation of a Technical Subcommittee tasked with crafting detailed guidelines for direct remittance. This subcommittee is expected to deliver these guidelines within three weeks and will also begin reviewing the Petroleum Industry Act (PIA) to address issues that could impede revenue collection.
Led by the Special Adviser to the President on Energy, the Technical Subcommittee comprises key figures, including the Solicitor-General of the Federation and the Permanent Secretary of the Federal Ministry of Justice, along with the Chairman of the Nigeria Revenue Service. This diverse team aims to balance governmental oversight with sectoral expertise.
As Nigeria moves forward with this new framework, the government’s commitment to optimizing oil and gas revenue management is clear. The new measures are designed to ensure that public funds are maintained in a manner that benefits the nation as a whole, setting the stage for improved fiscal health and accountability in the oil sector.
— Reported by Nexio News
