The Nigerian government has begun enforcing Executive Order 9 (2026), which mandates that all revenues from petroleum operations be paid directly into the Federation Account Allocation Committee (FAAC). The move, announced by Finance Minister Wale Edun, aims to ensure oil earnings are distributed strictly according to constitutional provisions among Nigeria’s federal, state, and local governments.
Minister Edun disclosed the development after the first meeting of the newly formed implementation committee in Abuja. The order directly challenges previous practices by instructing the Nigerian National Petroleum Company Limited (NNPC) to immediately stop deducting two key charges from profit oil and gas under Production Sharing Contracts: a 30% management fee and a 30% frontier exploration fund contribution. Additionally, remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF) have been suspended.
To maintain stability and investor confidence, the committee approved a transitional approach. Contractors will continue operating under the existing remittance framework until detailed guidelines are issued. This period allows for an orderly shift to the direct payment system outlined in the executive order, where contractors would pay profit oil, royalty oil, and tax oil straight into the Federation Account.
A technical subcommittee, chaired by the President’s Special Adviser on Energy, has been tasked with developing these comprehensive transition guidelines within three weeks. Its membership includes the Solicitor-General of the Federation, the Permanent Secretary of the Federal Ministry of Justice, the Chairman of the Nigeria Revenue Service, and the Chairman of the Forum of Commissioners of Finance. The subcommittee will also review the Petroleum Industry Act to resolve structural and fiscal issues affecting federation revenues.
The implementation committee stressed that the entire process is designed to enhance transparency and accountability in managing Nigeria’s petroleum resources. Minister Edun reaffirmed the government’s commitment to ensuring that oil and gas revenues translate into tangible benefits for citizens across all tiers of government. The coordinated rollout is expected to provide clearer direction for industry stakeholders while safeguarding the constitutional revenue shares of the three tiers of government.
