An executive order issued by President Bola Tinubu directing the Nigerian National Petroleum Company Limited (NNPCL) to stop deducting management fees and contributions to the Frontier Exploration Fund before remitting revenues has effectively halted income streams that generated about N2.076 trillion over four years, investigations have shown.
An analysis of monthly earnings reports submitted to the Federation Account Allocation Committee (FAAC) and obtained in Abuja on Wednesday revealed that the national oil company received N20.739 billion from the deductions in 2022, N695.9 billion in 2023, N452.6 billion in 2024, and N906.91 billion in 2025. This brings the total to approximately N2.1 trillion between 2022 and 2025.
The development followed the President’s directive that all revenues due to the federation must be remitted in full without prior deductions, in line with constitutional fiscal provisions and ongoing transparency reforms in the oil and gas sector.
The executive order prioritises constitutional provisions governing the Federation Account over certain operational funding arrangements under the Petroleum Industry Act. Specifically, it halts automatic deductions such as management fees and contributions to the Frontier Exploration Fund from oil and gas revenues before remittance, insisting that all earnings be paid first into the Federation Account as stipulated by the Constitution.
Supporters of the move, including several state governments and fiscal transparency advocates, have welcomed the directive, arguing that it will boost distributable revenues, strengthen accountability, and address longstanding concerns about opaque deductions from oil proceeds before sharing among the three tiers of government.
However, the order has also drawn caution from industry stakeholders and legal analysts, who warn that it could create tensions between statutory provisions of the Petroleum Industry Act and constitutional fiscal rules. They argue that the Frontier Exploration Fund and joint venture funding mechanisms were structured to support reserve growth and operational efficiency, and caution that abrupt changes without alternative funding models could slow investments and affect production levels.
The debate underscores broader concerns about balancing fiscal transparency with operational sustainability in Nigeria’s oil and gas sector, as policymakers seek to align reforms with both constitutional mandates and long-term energy sector objectives.
