The federal government has initiated a sweeping overhaul of petroleum revenue management, with Finance Minister Wale Edun signaling a potential review of the Petroleum Industry Act (PIA) to fully implement President Bola Tinubu’s Executive Order 9 and ensure oil revenues are handled in line with constitutional provisions. At its inaugural meeting on 26 February 2026, the implementation committee chaired by Edun directed NNPC Limited to immediately cease deducting the 30 percent management fee and the 30 percent frontier exploration fund from oil and gas profits under production sharing contracts. Gas flare penalty payments into the Midstream and Downstream Gas Infrastructure Fund were also suspended pending further review.
The move represents a fundamental shift in how Nigeria’s oil wealth is managed. The PIA, enacted in 2021, established a framework for commercialising NNPC and creating distinct revenue streams, but critics have long argued that deductions and special funds reduced the flow of oil revenues into the federation account, which is shared among federal, state, and local governments. By suspending these deductions, the government aims to maximise direct remittances and enhance fiscal transparency.
A technical subcommittee has been tasked with drafting guidelines and reviewing the PIA to close loopholes, strengthen revenues for all tiers of government, and ensure alignment with constitutional requirements. The transition to direct remittance of oil revenues into the federation account will be carefully managed to protect investor confidence, recognising that Nigeria competes for global oil capital against jurisdictions offering stable and predictable fiscal terms.
The timing is significant. Nigeria is seeking to ramp up crude production to meet OPEC quotas and boost foreign exchange earnings amid persistent currency pressures. Maximising revenue from existing production is as critical as attracting new investment, and the PIA review signals that the government is scrutinising every leakage point in the revenue chain. For state governments, which depend on federation account allocations to fund basic services, increased oil revenues could provide fiscal breathing room after years of constrained budgets.
However, the suspension of frontier exploration fund deductions raises questions about long-term investment in new oil provinces. The fund was designed to finance exploration in emerging basins to diversify production beyond the Niger Delta. Balancing immediate revenue needs with strategic investment in future capacity will be a key challenge for the technical committee.
The government has emphasised that protecting investor confidence remains paramount. Any perception that fiscal terms are unstable could deter the very investment needed to sustain production. The technical subcommittee’s work will therefore require careful calibration between maximising current revenues and maintaining Nigeria’s attractiveness as an investment destination.
