President Bola Tinubu has suspended the collection of management and frontier exploration fees by the Nigerian National Petroleum Company Limited (NNPC) under a sweeping Executive Order aimed at safeguarding the nation’s oil and gas revenues.

The directive, announced Wednesday by Uloma Amadi, Assistant Director of Information and Public Relations at the Federal Ministry of Finance, also mandates the direct remittance of taxes, royalties, and profit oil under Production Sharing Contracts (PSCs) to the appropriate fiscal authorities, effectively blocking deductions at source.

According to the ministry, the Executive Order, signed last week, seeks to realign oil and gas revenue flows with constitutional provisions and address revenue leakages that have weakened inflows into the Federation Account.

“His Excellency President Bola Tinubu signed an Executive Order to realign oil and gas revenue flows with constitutional requirements. The Order strengthens fiscal transparency, clarifies regulatory mandates, and enhances revenues accruing to the Federation from the oil and gas sector,” the ministry said in a statement.

The order suspends NNPC’s collection of management and frontier exploration fees, halts payments of gas flare penalties into the Midstream Gas Infrastructure Fund, and clearly delineates responsibilities between the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

It also establishes an inter-agency implementation committee, chaired by the Minister of Finance and Coordinating Minister for the Economy, to ensure smooth execution of the reforms.

The ministry emphasized that the measure reinforces provisions of the 1999 Constitution, which vests ownership of mineral resources in the Federation and mandates that all revenues derived from them be paid into the Federation Account.

The Executive Order specifically targets fiscal and structural arrangements introduced under the Petroleum Industry Act (PIA) 2021 that have led to off-budget allocations and deductions from Federation revenues.

“The Order has become urgent due to the sustained decline in oil and gas revenue inflows into the Federation Account, despite improvements in production levels and favourable market conditions. This shortfall has constrained the government’s ability to meet budget obligations and fund critical public investments in education, healthcare, and infrastructure,” the ministry added.

The statement further noted that the reforms aim to ensure the oil and gas sector operates transparently and delivers constitutionally compliant revenue flows that support economic growth.

“The fundamental purpose of the nation’s oil and gas sector, including the national oil company, is to convert hydrocarbon resources into sustainable revenues, investment, and economic activity that benefit the broader economy,” it said.

The reforms also come amid rising domestic fiscal pressures and increased global competition for energy capital.

“In such an environment, Nigeria cannot afford inefficiencies in the management of its most strategic economic asset,” the ministry said.

The Executive Order takes immediate effect as an interim corrective measure pending legislative amendments to entrench the reforms in law. The government described the move as a major step toward strengthening fiscal discipline, safeguarding revenue integrity, and ensuring that Nigeria’s natural resources deliver tangible value to citizens, investors, and the economy.

The directive is expected to reshape cash flow structures within the sector, particularly regarding NNPC’s cost recovery and funding mechanisms under the PIA.

Earlier data showed that NNPC received significant allocations for frontier oil exploration, representing deductions under PSCs and management fees, which had reduced the Federation’s gross oil revenue by nearly 60 percent. The President had previously directed a reassessment of these deductions, tasking the Economic Management Team to provide recommendations on optimizing revenue flows.