Nigerian President Bola Ahmed Tinubu has taken a major step to reform the country’s oil revenue management system by signing Executive Order No. 9 of 2026, aimed at ending multiple deductions that have reduced the amounts paid into the Federation Account.

The new directive mandates that all oil and gas revenues, including royalties, tax oil, profit oil, and profit gas under production sharing contracts, be remitted directly to the Federation Account. This measure is designed to ensure that federal, state, and local governments receive their full constitutional allocations without prior deductions.

The reform effectively eliminates several revenue retention mechanisms previously allowed under the Petroleum Industry Act (PIA) of 2021. Notably, the Nigerian National Petroleum Company Limited (NNPC) will no longer deduct management fees from profit oil and gas before remittance, nor retain funds allocated to exploration accounts that had reduced the distributable revenue pool.

In addition, proceeds from gas flaring penalties, which were previously directed to specific sectoral funds, will now be paid directly into the Federation Account. Oil and gas operators are required to comply immediately with the new remittance structure.

According to the presidency, the reform seeks to improve fiscal transparency, curb revenue leakages, and strengthen public finances at a time when Nigeria is working to boost government revenue and stabilize its economy. Analysts view the move as one of the most significant fiscal interventions in the petroleum sector in recent years, with the potential to substantially increase funds available to the three tiers of government.