President Bola Tinubu has signed a new Executive Order aimed at increasing oil and gas revenue paid into the Federation Account.
According to a statement released on Wednesday by his Special Adviser on Information and Strategy, Bayo Onanuga, the order is meant to protect and grow revenue from the oil and gas sector, reduce wasteful spending, remove overlapping structures, and ensure more funds are available for national development.
The President signed the order under the powers granted to him by the Constitution. The directive is based on Section 44(3) of the Constitution, which states that all minerals, oil, and natural gas in Nigeria belong to the Federal Government.
The statement explained that the order seeks to restore revenue meant for the Federal, State, and Local Governments. It said some of these funds were affected by provisions in the Petroleum Industry Act passed in 2021.
Under the current law, NNPC Limited retains 30 percent of the Federation’s oil revenue as a management fee from certain oil and gas contracts. The government believes this extra 30 percent is not necessary, especially since the company already retains 20 percent for its operations.
The statement also pointed to another 30 percent of oil and gas profits set aside as the Frontier Exploration Fund. The government said dedicating such a large amount to exploration could lead to idle funds and inefficient spending at a time when the country needs money for important sectors like security, education, healthcare, and energy transition.
It further mentioned the Midstream and Downstream Gas Infrastructure Fund, which is funded by gas flaring penalties and meant to support environmental clean-up and affected communities. However, the government noted that the Petroleum Industry Act had already created a separate Environmental Remediation Fund for similar purposes, raising concerns about duplication.
Overall, the Executive Order is intended to ensure that more oil and gas revenue flows directly into the Federation Account and is used for key national priorities.
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