The Federal Ministry of Finance has issued a sweeping directive ordering the immediate cessation of several petroleum-sector deductions and off-budget retentions, in what appears to be one of the most significant fiscal interventions in Nigeria’s oil and gas revenue framework in recent years.
In an official communication dated February 19, 2026, and titled “Implementation of Presidential Executive Order on Safeguarding Federation Oil and Gas Revenues and Regulatory Clarity – Immediate Remittance Directive and Retrospective Audit,” the Ministry directed that all revenues due to the Federation be remitted in full without prior deductions.
The directive was signed by the Honourable Minister of State for Finance, Dr. Doris Uzoka-Anite, who also chairs the Federation Account Allocation Committee (FAAC).
Immediate Suspension of Key Deductions
Under the new order, all institutions and operators are required to:
- Cease collection and management of the 30% allocation to the Frontier Exploration Fund (FEF);
- Suspend payment and retention of the 30% management fee on profit oil and profit gas previously payable to NNPC Limited;
- Stop payment of Gas Flare Penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF);
- Discontinue all off-budget allocations and administrative deductions inconsistent with the Executive Order.
The directive was circulated to major institutions across the petroleum and fiscal ecosystem, including NNPC Limited, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Revenue Mobilization Allocation and Fiscal Commission (RMAFC), the Nigeria Revenue Service, the Accountant-General of the Federation, and oil and gas operators.
Creation of Sub-Federation Account
A central component of the directive is the establishment of a designated Sub-Federation Account.
According to the order, all profit oil, profit gas, royalty oil, tax oil, gas flare penalties, and other petroleum-related revenues due to the Federation must be remitted directly into this account. The Office of the Accountant-General of the Federation will manage the account pending FAAC distribution.
No institution is permitted to retain, net off, or deduct funds before remittance. In addition, all outstanding balances currently held in commercial bank or Central Bank accounts relating to such revenues must be transferred into the Sub-Federation Account once operational guidelines are issued.
Detailed remittance procedures are expected to follow from the Accountant-General’s office.
Comprehensive Retrospective Audit Ordered
The Ministry has also commissioned a wide-ranging retrospective audit covering:
Frontier Exploration Fund (FEF)
- Total collections since inception under the Petroleum Industry Act;
- All expenditures and commitments;
- Current balances and investment placements.
Midstream and Downstream Gas Infrastructure Fund (MDGIF)
- Gas flare penalties collected;
- Transfers and utilization;
- Compliance with procurement regulations.
NNPCL 30% Management Fees
- Total deductions made;
- Utilization of retained funds;
- Outstanding balances due to the Federation.
All affected entities are required to provide complete financial records and grant audit teams full access. Where findings reveal outstanding sums owed to the Federation, immediate restitution into the Sub-Federation Account will be required.
The directive warns that any breach will be treated as a violation of a lawful executive order and constitutional fiscal provisions.
Weekly Reporting Mandated
Institutions subject to the directive must submit weekly remittance reports to the Office of the Minister of State for Finance to ensure compliance.
Copies of the communication were also sent to the Secretary to the Government of the Federation (SGF), the Chief of Staff to the President, the Central Bank of Nigeria (CBN), the Attorney General of the Federation, the Minister of Budget and Economic Planning, and the Director-General of the Budget Office of the Federation.
Fiscal Reset in Oil Revenue Management
The directive, issued pursuant to the 2026 Presidential Executive Order on safeguarding Federation oil and gas revenues and in line with Section 162 of the Constitution, signals a push for stricter revenue centralization and transparency in Nigeria’s petroleum sector.
If fully implemented, the move could significantly reshape how oil and gas revenues are collected, retained, and distributed, particularly regarding the Frontier Exploration Fund, gas infrastructure funding, and NNPCL’s management fee structure.
Industry stakeholders are now assessing the operational and financial implications of the order, as compliance timelines take immediate effect.