Abuja: President Bola Ahmed Tinubu has signed a new Executive Order to improve fiscal discipline in Nigeria’s oil and gas sector. The government says this will make the process more transparent and help more revenue reach the Federation Account.
The Federal Ministry of Finance announced that the order suspends several deductions and off-budget allocations that were introduced under the Petroleum Industry Act (PIA) 2021.
Key measures include stopping the collection of management and frontier exploration fees by the Nigerian National Petroleum Company Limited (NNPCL). Taxes, royalties, and profit oil from Production Sharing Contracts will now be paid directly to the fiscal authorities.
Other steps include stopping gas-flare penalty payments into the Midstream Gas Infrastructure Fund. The order also clarifies the roles of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The order also sets up an inter-agency committee to oversee the changes, led by the Minister of Finance.
Officials say these reforms are needed because oil and gas revenues have fallen, even as production is up and global market conditions are favourable. This shortfall has made it harder for the government to fund the budget and invest in education, healthcare, and infrastructure.
“The fundamental purpose of the nation’s oil and gas sector is to convert hydrocarbon resources into sustainable revenues, investment, and economic activity that benefit the wider economy,” the statement read. “Achieving this objective requires revenue flows that are transparent, constitutionally compliant, and fully accounted for.”
The Executive Order takes effect immediately and is intended as a temporary fix until new laws can make the reforms permanent. Analysts believe this could reassure investors by clarifying regulations and demonstrating Nigeria’s commitment to fiscal transparency, especially as global energy markets become more competitive.
The government says these reforms are meant to ensure that Nigeria’s natural resources bring real benefits, such as better schools, hospitals, and infrastructure that support economic growth for everyone.
