The Federal Government has approved a transition period for the implementation of direct remittance of oil revenues into the Federation Account, in line with Executive Order 9 of 2026 issued by President Bola Ahmed Tinubu.
The decision was reached by the Implementation Committee on Executive Order 9 following its inaugural meeting held on February 26, 2026.
Gradual Rollout to Protect Contracts and Investor Confidence
In a statement released by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who chairs the committee, the government said the transition framework is designed to introduce the new system without disrupting existing contractual and financing arrangements within the oil and gas sector.
Executive Order 9 mandates that revenues derived from petroleum operations, including profit oil, royalty oil, and tax oil- be paid directly into the Federation Account to strengthen public revenue management and safeguard funds due to the three tiers of government.
According to Edun, the committee agreed that implementation must be handled carefully to preserve investor confidence while ensuring improved transparency and fiscal discipline.
The committee therefore approved a defined transition window before the full operationalization of direct contractor remittances into the Federation Account.
Existing Payment System to Continue Temporarily
During the transition period, contractors will continue to remit revenues under the current payment structure until detailed operational guidelines are issued.
Edun stated that the committee will provide clear and standardized guidance to ensure an orderly migration to the new remittance framework.
Technical Subcommittee to Develop Guidelines, Review PIA
To drive implementation, the committee approved the establishment of a technical subcommittee tasked with developing detailed transition guidelines within three weeks.
The subcommittee will also commence a review of the Petroleum Industry Act (PIA) to address structural and fiscal provisions that may be limiting revenue flows to the Federation.
According to the statement, the review will examine aspects of the law that could weaken government earnings from petroleum operations.
The technical subcommittee will be chaired by the Special Adviser to the President on Energy, Mrs. Olu Verheijen. Members include the Solicitor-General of the Federation and Permanent Secretary of the Federal Ministry of Justice, the Chairman of the Nigeria Revenue Service, the Chairman of the Forum of Commissioners of Finance, and representatives of the Minister of State for Petroleum Resources (Oil). The Budget Office of the Federation will serve as secretariat.
Immediate Directives Under Executive Order 9
As part of the measures contained in Executive Order 9, the government has directed NNPC Limited to discontinue certain deductions under Production Sharing Contracts.
Specifically, NNPC Limited will cease the deduction of a 30 percent management fee and a 30 percent frontier exploration fund contribution from profit oil and profit gas under such contracts. The directive takes immediate effect.
In addition, remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund have been suspended in line with the Executive Order.
Strengthening Revenue Accountability
The Implementation Committee stated that the reforms are intended to ensure that revenues generated from Nigeria’s oil and gas resources are properly accounted for and paid into the Federation Account in accordance with constitutional provisions.
The committee reaffirmed the President’s directive that petroleum revenues must be handled in a manner that protects public funds and supports the fiscal stability of federal, state, and local governments.
It added that further updates will be provided as work progresses on the new remittance framework, while expressing appreciation to industry stakeholders and government institutions for their cooperation.
According to the committee, the reforms form part of broader efforts to ensure that Nigeria’s petroleum resources deliver measurable fiscal benefits across all levels of government.