President Bola Tinubu has suspended the collection of management and frontier exploration fees by Nigerian National Petroleum Company Limited (NNPC Ltd.) through a new Executive Order aimed at safeguarding oil and gas revenues due to the Federation.
The directive was announced by the Federal Ministry of Finance, which said the Order seeks to realign oil and gas revenue flows with constitutional provisions and curb leakages affecting the Federation Account.
According to the ministry, the Order mandates the direct remittance of taxes, royalties, and profit oil under Production Sharing Contracts to appropriate fiscal authorities, effectively blocking deductions at source.
The Executive Order:
· Suspends NNPC’s collection of management and frontier exploration fees
· Halts payment of gas flare penalties into the Midstream Gas Infrastructure Fund
· Clarifies regulatory roles between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA)
· Establishes an inter-agency implementation committee chaired by Finance Minister Wale Edun
The ministry said the Order reinforces the 1999 Constitution, which vests mineral resource ownership in the Federation and requires all revenues to be paid into the Federation Account.
The action follows concerns over declining oil and gas inflows despite improved production and favourable market conditions. Officials noted that prior arrangements under the Petroleum Industry Act (PIA) allowed significant deductions — including 30% of Production Sharing Contract profits for frontier exploration and another 30% as management fees.
The Director-General of the Budget Office, Tanimu Yakubu, had earlier disclosed that nearly 60% of gross oil revenue was lost to such deductions, prompting calls for legislative amendments.
The Executive Order takes immediate effect and is described as an interim corrective measure pending possible amendments by the National Assembly. Observers say the move could significantly reshape oil sector revenue flows and NNPC’s funding structure under the PIA.
