Nigeria Initiates Review of Petroleum Industry Act to Enhance Revenue Generation
In a significant move aimed at strengthening revenue flows from the petroleum sector, the Nigerian federal government has begun a comprehensive review of the Petroleum Industry Act (PIA). This decision was reached during the inaugural meeting of the Implementation Committee for Executive Order 9, which took place on February 26, 2026.
The Executive Order, issued by President Bola Ahmed Tinubu, is designed to safeguard the country’s federal revenues and improve the management of payments related to oil production. At the heart of this initiative is a pressing need to rectify structural and fiscal challenges that have hindered the effective generation of revenues for the Federation.
According to a statement from Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, this review is a critical response to anomalies that have weakened revenue collection efforts at the national level. The intention is to build a more robust framework to ensure that Nigeria’s vast petroleum resources effectively benefit its citizens.
To facilitate this review process, the committee has decided to establish a technical subcommittee tasked with evaluating the current law and proposing necessary amendments. This subcommittee is also charged with drafting detailed guidelines that will enable the direct remittance of petroleum revenues into the Federation Account within a tight three-week deadline.
This transition aligns with Section 2, Sub-section 3 of Executive Order 9, which mandates that contractors involved in profit oil, royalty oil, and tax oil must directly submit payments to the Federation Account. However, the committee has emphasized the importance of respecting existing contracts and financing arrangements to maintain investor confidence during this shift.
Part of the new framework includes a defined transition period to operationalize the direct remittance strategy. Until the new guidelines are finalized, contractors will continue adhering to the existing process of revenue remittance.
In a bid to immediately enhance revenue security for the Federation, the committee has directed the Nigerian National Petroleum Company Limited to stop collecting a 30% management fee and a 30% frontier exploration fund deduction from profit oil and profit gas derived from Production Sharing Contracts. Additionally, all remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund have been suspended, in accordance with the Executive Order.
The committee reaffirmed President Tinubu’s directive that all petroleum-derived revenues must adhere to constitutional integrity, ensuring fiscal stability for all three tiers of government: federal, state, and local.
The technical subcommittee will include notable figures such as the President’s special adviser on energy, who will chair the group, the Solicitor-General of the Federation, and representatives from the Nigeria Revenue Service and the Minister of State for Petroleum Resources. The Budget Office of the Federation will provide secretarial support to the subcommittee.
This effort comes as Nigeria grapples with the financial implications of fluctuating global oil prices and seeks to create a stable and beneficial framework to utilize its rich petroleum resources. The government is fully committed to ensuring that reforms will not only enhance revenue collection but will also translate into tangible benefits for all Nigerians.
The newly established committee is determined to provide ongoing guidance and timely updates as the implementation unfolds. Their focus remains on ensuring that Nigeria’s petroleum sector delivers concrete advantages to the citizens, reinforcing the government’s pledge to transparency and accountability in managing the nation’s resources.
— Reported by Nexio News
