Executive Order 9: FG Halts NNPC Deductions, Sets Transition for Contractor Remittances

The federal government has directed the Nigerian National Petroleum Company Limited (NNPC Ltd) to immediately suspend all deductions from contractor remittances under Executive Order 9, paving the way for a smoother transition in federal revenue flows.

The decision was taken at the inaugural meeting of the Implementation Committee for Executive Order 9 of 2026, held on February 26, 2026.

The committee also approved the review of the Petroleum Industry Act (PIA) to correct structural and fiscal anomalies that weaken federation revenues.

The minister of finance and coordinating minister of the economy, Wale Edun, stated that in line with the President’s directive, NNPC Limited shall cease, with immediate effect, the collection of the 30 per cent management fee and the 30 per cent frontier exploration fund deductions from profit oil and profit gas under Production Sharing Contracts (PSCs).

In a statement issued following the inaugural meeting, Edun, who also the chairman of the committee, said that additionally, all remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF) are suspended with immediate effect, in line with the Executive Order.
The move addresses longstanding concerns over revenue leakages, where NNPC had been deducting funds for upstream operations, royalties, and taxes before remitting balances to the government.
The EO9 was issued by President Bola Ahmed Tinubu to safeguard federal revenues and strengthen the management of petroleum revenue flows.
According to , Wale Edun, the review of the PIA is aimed at correcting structural and fiscal anomalies that weaken Federation revenues.

The committee approved a structured transition for direct contractor payments of profit oil, royalty oil, and tax oil into the Federation Account, respecting existing contracts to preserve investor confidence; detailed guidelines will follow from a new Technical Subcommittee led by the special adviser to the President on Energy.

The committee resolved to establish a technical subcommittee to undertake the review and propose necessary adjustments to the law.

The subcommittee is also mandated to develop detailed guidelines within three weeks for the transition to direct remittance of petroleum revenues into the Federation Account.

The move is in line with Section 2, Sub-section 3 of Executive Order 9, which provides for direct payments by contractors of profit oil, royalty oil and tax oil into the Federation Account.

The committee, however, stressed that the transition would be implemented in a manner that respects existing contractual and financing arrangements to maintain investor confidence.

It approved a defined transition period for the operationalisation of the new direct remittance framework.

Until detailed guidelines are issued, contractors will continue to remit under the current process.

As part of immediate measures to protect Federation revenues, the committee directed the Nigerian National Petroleum Company Limited to cease the collection of the 30 per cent management fee and the 30 per cent frontier exploration fund deductions from profit oil and profit gas under Production Sharing Contracts.

It also suspended, with immediate effect, all remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund, in line with the Executive Order.

The committee reaffirmed the President’s directive that revenues accruing to the Federation from petroleum operations must be handled in accordance with constitutional principles and in a manner that supports the fiscal stability of the three tiers of government.

Membership of the technical subcommittee includes the special adviser to the President on Energy, who will serve as chairman; the Solicitor-General of the Federation and Permanent Secretary, 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 provide secretarial support.

The committee pledged to provide coordinated guidance and timely updates as implementation progresses, noting that the reforms are designed to ensure Nigeria’s petroleum resources deliver measurable benefits to citizens across the Federation.