Based on current revenue projections, as much as ₦14.57 trillion in additional allocations could flow to the federal, state and local governments if President Bola Ahmed Tinubu’s Executive Order No. 9 of 2026 on oil and gas revenue remittances is fully implemented — a potential windfall that could significantly ease pressure on Nigeria’s strained public finances.
The estimate, derived from 2025 revenue inflow data submitted to the Federation Account Allocation Committee (FAAC), reflects funds previously subject to layered deductions and retention mechanisms under the Petroleum Industry Act (PIA).
Signed on February 13, the Executive Order mandates that royalty oil, tax oil, profit oil, profit gas and other revenues due to the Federation under production sharing, profit sharing and risk service contracts be paid directly into the Federation Account. It effectively suspends certain PIA provisions that allowed upstream deductions, including the 30 per cent management fee on profit oil and profit gas and the 30 per cent Frontier Exploration Fund allocation.
An analysis of 2025 remittance projections shows that about ₦906.91 billion was expected to be retained as management fees and frontier exploration funds. Oil and gas royalties totalling ₦7.55 trillion and gas flaring penalties of ₦611.42 billion were also subject to complex remittance structures.
By centralising these inflows, fiscal authorities say the reform could dramatically improve transparency and revenue availability at a time when Nigeria faces mounting debt service obligations and funding gaps in infrastructure, healthcare, security and education.
The Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mohammed Bello Shehu, described the order as “a bold, constitutionally grounded, and fiscally transformative intervention aimed at restoring transparency, eliminating revenue leakages, and strengthening the revenue base of the three tiers of government.”
According to RMAFC, structural provisions within the PIA had created channels through which substantial Federation revenues were subjected to multiple deductions before remittance, significantly reducing net inflows into the Federation Account.
“With this Executive Order, the constitutional architecture of revenue remittance is strengthened. It closes structural leakages, eliminates duplicative deductions, and ensures that revenues due to the Federation are remitted transparently,” Shehu said.
At the centre of the reform is the recalibration of the fiscal relationship between the Federation and the Nigerian National Petroleum Company Limited (NNPCL). Under the PIA framework, NNPCL retained significant portions of upstream revenues before remitting balances to FAAC, reducing the Federation’s effective share of production sharing contract (PSC) profit oil to 40 per cent.
Although NNPCL pledged to remit ₦3.25 trillion in interim dividends in 2025, FAAC records indicate that no dividend payments were made during the year, intensifying scrutiny over the dividend-based revenue model introduced by the PIA.
Industry operators have welcomed the Executive Order. The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) said the directive would enhance accountability and strengthen commercial discipline within NNPCL. Its national president, Dr Billy Gillis-Harry, described the move as “courageous and reform-driven,” noting that predictable inflows into the Federation Account would improve macroeconomic stability and investor confidence.
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Economists say the potential ₦14.57 trillion revenue boost could materially improve Nigeria’s balance sheet by enhancing debt servicing capacity, stabilising monthly FAAC distributions and reducing fiscal uncertainty for subnational governments.
However, analysts caution that the durability of the reform will depend on enforcement and possible legislative amendments to permanently align the PIA with constitutional provisions governing revenue remittance.
For now, the Executive Order represents one of the most ambitious fiscal recalibrations in Nigeria’s oil sector since the PIA’s enactment — and, if fully implemented, could provide a critical lifeline to government finances.
