Tinubu moves to plug oil revenue leakages
President Bola Ahmed Tinubu has signed a new Executive Order aimed at ensuring that revenue from Nigeria’s oil and gas sector is handled in line with constitutional rules and properly
President Bola Ahmed Tinubu has signed a new Executive Order aimed at ensuring that revenue from Nigeria’s oil and gas sector is handled in line with constitutional rules and properly paid into government accounts.
According to a statement released on Wednesday by the Federal Ministry of Finance, the directive, signed last week, is designed to improve transparency in the management of oil income, define the duties of regulators more clearly, and increase the funds that flow into the Federation Account from petroleum operations.
The ministry said, “The Order seeks to strengthen fiscal transparency, clarify regulatory mandates, and enhance revenues accruing to the Federation from the oil and gas sector.” It explained that the decision comes at a time when government earnings from oil and gas have not matched expectations despite better production levels and favourable prices in international markets.
Under the new directive, the Nigerian National Petroleum Company Limited will no longer collect management and frontier exploration fees for now. It also requires contractors operating under production sharing contracts to pay taxes, royalties, and profit oil directly to the proper government authorities instead of routing them through other channels.
The order further suspends payments of gas flare penalties into the Midstream Gas Infrastructure Fund. Officials said this step is part of a broader effort to ensure that revenues are accounted for in a way that follows legal and constitutional requirements.
It also clarifies the roles of the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority so that investors and operators can better understand which agency is responsible for specific regulatory duties.
In addition, the directive creates an inter-agency implementation committee that will be chaired by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun. The committee is expected to oversee how the new rules are carried out and ensure that all relevant government bodies work together smoothly.
Read Also: Tinubu’s re-election sacrosanct, says Epe chairman
The ministry said the Executive Order addresses certain financial and structural arrangements introduced under the Petroleum Industry Act that have led to deductions and allocations outside the federal budget framework. Officials explained that these adjustments are meant to bring oil revenue handling fully in line with constitutional provisions governing public funds.
According to the statement, the directive reinforces the 1999 Constitution, which places ownership of mineral resources in the hands of the federation and requires that all earnings from those resources be paid into the Federation Account and shared according to existing legal procedures.
The ministry said the action became urgent because government revenue from oil and gas has remained under pressure.
“The Order has become both necessary and urgent considering 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 capacity to meet budgetary obligations and to finance critical public investments in education, healthcare, and infrastructure,” it said.
Officials noted that Nigeria’s fast-growing and youthful population is increasing demand for jobs, quality schooling, healthcare services, and infrastructure, all of which require steady government funding. They warned that in a global energy market that is becoming more competitive, countries must manage their natural resources efficiently or risk losing investment.
The ministry added that the main goal of the oil and gas sector, including the national oil company, is to convert petroleum resources into steady income, investment, and economic activity that benefits the wider economy. It said achieving this requires revenue flows that are transparent, lawful, and fully recorded.
The Executive Order takes effect immediately and is expected to serve as a temporary corrective step while the government works with lawmakers to make the changes permanent through legislation.
Authorities said the reforms are intended to strengthen financial discipline, protect public revenue, and ensure that Nigeria’s natural resources generate clear benefits for citizens, investors, and the economy.
