Transition Period For Direct Oil Revenue Payments Into Federation Account -

 Tinubu Govt Approves Transition Period For Direct Oil Revenue Payments Into Federation Account

The Nigerian Government has approved a transition period for oil contractors to begin direct remittance of petroleum revenues into the Federation Account following the implementation of Executive Order 9 signed by President Bola Ahmed Tinubu.

President Bola Tinubu’s administration claimed that the move is aimed at tightening oversight of

Nigeria’s oil earnings and preventing revenue leakages that have long plagued the petroleum sector.

The decision was reached during the inaugural meeting of the Implementation Committee on Executive Order 9 of 2026, held on February 26, 2026.

In a statement issued on Monday, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who chairs the committee, said the transition arrangement was approved to prevent disruptions to existing contractual and financing obligations within the oil industry.

According to him, the policy seeks to ensure that revenues derived from petroleum operations, including profit oil, royalty oil and tax oil, are paid directly into the Federation Account to strengthen public finance management across federal, state and local governments.

Edun explained that while the government is determined to enforce the new payment structure, the committee agreed that implementation must be handled cautiously to preserve investor confidence.

“With respect to Section 2, Sub-section 3 of Executive Order 9 on direct payments by contractors into the Federation Account, the Implementation Committee agreed that this transition must be implemented in a manner that respects existing contractual and financing arrangements and maintains investor confidence,” he said.

He added that a defined transition period had been approved before the full operationalisation of the new remittance system.

“For this reason, the Committee approved a defined transition period for the operationalization of direct payments by contractors of profit oil, royalty oil and tax oil into the Federation Account,” Edun stated.

During the transition phase, existing payment arrangements will remain in force pending the release of detailed operational guidelines.

“Until the Committee issues detailed guidelines, contractors will continue to remit under the current process. During the transition period, the Committee will issue clear, standardised guidance to ensure an orderly changeover,” he added.

To drive implementation, the committee also approved the establishment of a technical subcommittee tasked with developing the operational framework for the transition within three weeks.

The subcommittee will also commence a review of the Petroleum Industry Act (PIA) to identify structural and fiscal provisions believed to weaken government revenues from petroleum operations.

“The Technical Subcommittee will develop the detailed guidelines for the transition to direct remittance within three weeks and commence a review of the Petroleum Industry Act to address structural and fiscal anomalies that weaken Federation revenues,” Edun said.

The panel will be chaired by the Special Adviser to the President on Energy, Mrs. Olu Verheijen, and will include senior officials from key institutions, including the Office of the Solicitor-General of the Federation, the Federal Ministry of Justice, the Nigeria Revenue Service, 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.

As part of the reforms introduced under Executive Order 9, the government also directed NNPC Limited to immediately halt certain deductions under Production Sharing Contracts.

According to the committee, NNPC Limited will stop collecting a 30 per cent management fee as well as a 30 per cent frontier exploration fund deduction from profit oil and profit gas.

The order further suspends all remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund with immediate effect.

The implementation committee said the reforms are intended to ensure that revenues generated from Nigeria’s oil and gas resources are fully accounted for and paid into the Federation Account in line with constitutional provisions.

“The Committee reaffirmed the President’s directive that revenues accruing to the Federation from petroleum operations must be handled in a manner that upholds constitutional principles, protects revenues accruable to the Federation and supports the fiscal stability of all three tiers of government,” the statement added.

The committee also expressed appreciation to stakeholders across the petroleum industry and government institutions for their cooperation, noting that the reforms form part of broader efforts by the Tinubu administration to ensure Nigeria’s oil wealth translates into measurable benefits for citizens.