Tinubu signs executive order for direct remittance of oil and gas revenues to FAAC
President Bola Tinubu has signed an executive order mandating the direct remittance of oil and gas revenues to the Federation Account, in a move aimed at safeguarding national resources, eliminating duplicative deductions, and redirecting funds for the benefit of Nigerians.
The Executive Order, issued under Section 5 and Section 44(3) of the Constitution, addresses revenue leakages arising from the Petroleum Industry Act (PIA) of 2021, which allowed multiple deductions and management fees under NNPC Limited’s operations.
According to a statement by Bayo Onanuga, the President’s spokesperson, these deductions have sharply reduced inflows to the Federation Account, limiting the ability of federal, state, and local governments to fund critical national priorities.
Under the order, NNPC Limited will no longer collect the 30% Frontier Exploration Fund or the 30% management fee on profit oil and profit gas revenues, which will now be remitted directly to the Federation Account. Similarly, operators of oil and gas assets under Production Sharing Contracts are required to pay all royalties, profit oil, profit gas, and taxes directly to the Federation Account.
The Executive Order also suspends payments of gas flaring penalties into the Midstream and Downstream Gas Infrastructure Fund, directing all proceeds to the Federation Account instead. Expenditure from the MDGIF will henceforth comply with public procurement laws and regulations.
President Tinubu highlighted that the reforms are critical for national budgeting, debt sustainability, economic stability, and the overall well-being of Nigerians. He also announced a comprehensive review of the PIA in consultation with stakeholders to address fiscal and structural anomalies.
To ensure effective implementation, the President approved the constitution of an Implementation Committee comprising key ministers, the Chairman of the Nigeria Revenue Service, and other relevant officials. The Budget Office of the Federation will provide secretariat support.
