JUST IN: Tinubu Suspends NNPCL’s Deduction Of Oil Exploration Fees

President Bola Ahmed Tinubu has suspended the deduction of oil exploration and management fees by the Nigerian National Petroleum Company Limited, in a sweeping executive order aimed at protecting federation revenues.
The directive, signed last week and disclosed Wednesday night by the Federal Ministry of Finance, takes immediate effect.
At the core of the order is the suspension of NNPCL’s collection of management fees and frontier exploration fees. The move effectively halts deductions that previously reduced funds accruing to the Federation Account.
The President also directed that taxes, royalties and profit oil under Production Sharing Contracts be remitted directly by contractors to the appropriate fiscal authorities.
In addition, the order suspends the payment of gas flare penalties into the Midstream Gas Infrastructure Fund.
The Ministry said the Executive Order was issued to realign oil and gas revenue flows with constitutional requirements and enhance fiscal transparency.

According to the statement, the 1999 Constitution vests ownership of mineral resources in the Federation. It also mandates that all revenues derived from those resources be paid into the Federation Account for appropriation under established laws.

The government noted that certain fiscal and structural arrangements introduced under the Petroleum Industry Act had led to off-budget allocations and deductions from Federation revenues.

The new directive seeks to correct that framework.

Officials described the measure as urgent, citing a sustained decline in oil and gas revenue inflows into the Federation Account despite improved production levels and favourable market conditions.

The shortfall, the ministry said, has constrained the government’s capacity to meet budgetary obligations. It has also limited funding for education, healthcare and infrastructure.

Nigeria’s rapidly growing population, particularly its youthful demographic, is placing increasing pressure on public finances.

The government said it could not afford inefficiencies in the management of the oil and gas sector, which remains the country’s most strategic economic asset.

“The fundamental purpose of the nation’s oil and gas sector, including the national oil company, is to convert hydrocarbon resources into sustainable revenues, investment, and economic activity that benefit the broader economy,” the statement said.

It stressed that achieving this objective requires revenue flows that are transparent, constitutionally compliant and fully accounted for.

Beyond revenue controls, the Executive Order clarifies regulatory boundaries within the sector.

It delineates responsibilities between the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, with the aim of enhancing certainty for operators and investors.
An inter-agency implementation committee has also been established to ensure coordinated execution of the reforms.

The committee will be chaired by the Minister of Finance and Coordinating Minister of the Economy.

The Executive Order is described as an interim corrective measure pending legislative amendments to entrench the reforms in statute.

By suspending NNPCL’s deduction of exploration and management fees, the President has effectively tightened oversight over upstream oil revenues.

The administration said the reforms represent a decisive step toward safeguarding revenue integrity, strengthening fiscal discipline and ensuring that Nigeria’s oil wealth delivers tangible value to citizens and the economy.