The Federal Government has commenced the direct remittance of petroleum revenue to the Federation Account Allocation Committee (FAAC), marking a major shift in the management and distribution of oil and gas earning across the three tiers of government.
The move follows the implementation of Executive Order 9 of 2026, which mandates contractors operating underproduction sharing contracts to remit profit oil, royalty oil and tax oil directly into the Federation Account, in a bid to enhance transparency, curb revenue leakages and strengthen fiscal stability.
In a statement issued on Monday, the Minister of Finance and Coordinating Minister of the Economy and Chairman of the Implementation Committee, Wale Edun, said the new remittance framework is designed to uphold constitutional provisions, eliminate revenue leakages and ensure that funds due to the Federation are fully accounted for and promptly distributed to the three tiers of government.
He explained that while the transition to direct remittance would be implemented in phases to respect existing contractual and financing arrangements, the Federal Government remains committed to providing clear operational guidelines to oil companies to ensure a smooth and orderly changeover without disrupting investor confidence.
According to the statement, “In line with the President’s directive, NNPC Limited shall cease, with immediate effect, the collection of the 30% management fee and the 30% frontier exploration fund deductions from profit oil and profit gas under Production Sharing Contracts (PSCs).
“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. With respect to Section 2, Sub-section 3 of the Executive Order on direct payments by contractors into the Federation Account, the Committee agreed that this transition must be implemented in a manner that respects existing contractual and financing arrangements, and maintains investor confidence.”
The committee disclosed that a Technical Subcommittee has been constituted to develop detailed implementation guidelines within three weeks and to review relevant provisions of the Petroleum Industry Act to address structural and fiscal gaps affecting Federation revenues.
“The Technical Subcommittee will be led by the Special Adviser to the President on Energy, and will include the Solicitor-General of the Federation and Permanent Secretary Federal Ministry of Justice, the Chairman of the Nigeria Revenue Service, and the Chairman of the Forum of Commissioners of Finance, representatives of the Minister of State Petroleum Resources, Oil, with secretarial support from the Budget Office of the Federation,” the statement added.
The Committee affirmed its commitment to providing coordinated guidance and timely updates as the implementation of Executive Order 9 progresses.
It commended the cooperation of all stakeholders in supporting the President’s efforts to ensure that Nigeria’s petroleum resources generate tangible and measurable benefits for citizens across the Federation.
The Committee also reiterated the President’s directive that revenues from petroleum operations must be managed in accordance with constitutional principles, safeguarding funds due to the Federation and reinforcing the fiscal stability of all three tiers of government.