President Bola Tinubu’s order halts NNPC revenue deductions worth N2.1tn from 2022–2025, ensuring full remittance to the Federation Account
President Bola Tinubu’s executive order stopping the Nigerian National Petroleum Company Limited (NNPC) from deducting management fees and contributions to the Frontier Exploration Fund has effectively frozen revenue streams that generated about N2.076 trillion between 2022 and 2025.
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Analysis of monthly earnings submitted to the Federation Account Allocation Committee shows that NNPC retained N20.739 billion in 2022, N695.9 billion in 2023, N452.6 billion in 2024, and N906.91 billion in 2025.
The order mandates that all oil and gas revenues must be remitted in full to the Federation Account before any operational deductions, in line with constitutional fiscal provisions.
The directive has drawn mixed reactions.
State governments and fiscal transparency advocates have welcomed the move, arguing it will boost distributable revenues and strengthen accountability.
Industry players and legal experts, however, warned that halting deductions could conflict with the Petroleum Industry Act’s statutory funding provisions, potentially slowing investments in frontier exploration and joint ventures.
Labour unions, including the Petroleum and Natural Gas Senior Staff Association of Nigeria, urged clarity on implementation, stressing that reforms must not compromise production or job security.
They called for transparent funding mechanisms to support critical industry projects while ensuring oversight of remitted funds.
Data from 2022 to 2025 highlights significant volatility in deductions retained by NNPC. Management fees and frontier funds surged by over 3,200 per cent from 2022 to 2023, dropped sharply in 2024, and doubled again in 2025.
Monthly trends underscored fluctuations, with retained earnings swinging from declines of over 73 per cent to surges above 1,200 per cent, reflecting unstable operational deductions prior to the directive.
An NNPC insider, speaking on condition of anonymity, said the order could disrupt the monitoring framework for production sharing contracts (PSCs) and affect hundreds of staff managing deepwater operations.
“We have 400 to 500 staff dedicated daily to PSC oversight, from rig operations to cost monitoring. This directive could disrupt production and investor confidence,” the source said.
The official explained that under current arrangements, royalties and taxes are remitted to the Federation Account through crude oil lifting, not cash transfers.
Altering this process could complicate obligations tied to crude-backed loans and affect ongoing PSC operations, particularly in deepwater assets.
Experts warn that while the order strengthens fiscal transparency, its success will depend on disciplined implementation and balancing revenue reforms with sustained oil and gas investment.
The Frontier Exploration Fund, designed under the Petroleum Industry Act to boost reserves in frontier basins, now requires alternative funding through the national budget or private investment to maintain operational efficiency.
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A presidential committee has been tasked with overseeing the implementation of the directive, ensuring full compliance and minimising disruptions across the sector.
