In perhaps the most significant structural shift in the Nigerian oil sector since the 2021 Petroleum Industry Act (PIA), President Bola Tinubu has signed a landmark Executive Order that fundamentally changes how the nation’s "black gold" wealth is handled.

Restoring the Federation Account

For years, the Nigerian National Petroleum Company Limited (NNPCL) has operated under a framework that allowed it to retain 30% of Profit Oil and Profit Gas as a "management fee," alongside another 30% for the Frontier Exploration Fund. Critics and state governors have long argued that these deductions starved the Federation Account—the pot from which federal, state, and local governments are funded.

As of February 13, 2026, the President has ordered that all oil and gas revenues (including Royalty Oil, Tax Oil, and Profit Gas) must be paid directly into the Federation Account.

Why This Matters

• Eliminating Duplication: The Presidency noted that NNPCL already retains 20% of its profits for working capital. The additional 30% "management fee" was deemed "unjustified" and a duplicative structure.

• Fiscal Boost: Experts estimate this move could inject an additional ₦15 trillion into the federation's coffers, providing much-needed relief for states struggling with the new minimum wage and infrastructure projects.

• The Legal Tussle: While the order is gazetted, legal experts are already debating whether an Executive Order can override specific sections of the PIA. We may see a legislative follow-up in the National Assembly to codify these changes.