FG Approves Transition Period for Direct Remittance of Oil Revenues into Federation Account

FG Approves Transition Period for Direct Remittance of Oil Revenues into Federation Account

JOEL OLADELE, Abuja

The Federal Government has approved a defined transition period for the direct remittance of petroleum revenues into the Federation Account, as part of efforts to safeguard public funds and strengthen fiscal management.

This was disclosed on Monday in a statement signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who also chairs the Implementation Committee for Executive Order 9 of 2026.

According to the statement, the approval followed the inaugural meeting of the Implementation Committee held on February 26, 2026, in line with Executive Order 9 issued by President Bola Ahmed Tinubu to protect Federal revenues and improve the management of petroleum revenue flows.

The Committee reaffirmed the President’s directive that all revenues accruing to the Federation from petroleum operations must be handled in a way that upholds constitutional provisions, safeguards funds due to the Federation, and supports fiscal stability across the three tiers of government.

On the issue of direct payments by contractors into the Federation Account, the Committee stressed that the process must respect existing contractual and financing arrangements while maintaining investor confidence.

“The Committee approved a defined transition period for the operationalisation of direct payments by contractors of profit oil, royalty oil, and tax oil into the Federation Account.

Until the Committee issues detailed guidelines, contractors will continue to remit under the current process. During the transition period, the Committee will issue clear, standardised guidance to ensure an orderly changeover,” the statement said.

As part of immediate measures under the Executive Order, the Committee directed that NNPC Limited should cease the collection of the 30 per cent management fee and the 30 per cent frontier exploration fund deductions from profit oil and profit gas under Production Sharing Contracts.

It also announced the suspension of all remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund, in line with the provisions of the Executive Order.

To drive the transition process, the Committee approved the establishment of a Technical Subcommittee tasked with developing detailed guidelines for the direct remittance system within three weeks.

The subcommittee will also begin a review of the Petroleum Industry Act to address structural and fiscal issues affecting Federation revenues.

The Technical Subcommittee will be led by the Special Adviser to the President on Energy and will include the Solicitor-General of the Federation and Permanent Secretary of the Federal Ministry of Justice, the Chairman of the Nigeria Revenue Service, the Chairman of the Forum of Commissioners of Finance, as well as representatives of the Minister of State for Petroleum Resources (Oil). The Budget Office of the Federation will provide secretarial support.

The Committee pledged to continue providing coordinated guidance and timely updates as the implementation progresses, while commending stakeholders for their cooperation in ensuring that Nigeria’s petroleum resources translate into measurable benefits for citizens across the country.