President Tinubu Orders Halt to NNPC Pre-Remittance Deductions, Blocking N2.1tn Retained Funds
President Tinubu Orders Halt to NNPC Pre-Remittance Deductions, Blocking N2.1tn Retained Funds
President Tinubu Orders Halt to NNPC Pre-Remittance Deductions, Blocking N2.1tn Retained Funds
President Bola Ahmed Tinubu on Thursday, February 26, 2026, issued an executive order directing that the Nigerian National Petroleum Company Limited (NNPC) stop deducting management fees and Frontier Exploration Fund contributions before remitting revenues to the Federation Account. The move effectively blocks approximately ₦2.1 trillion retained by the national oil firm between 2022 and 2025.
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The order mandates that all oil and gas revenues be paid into the Federation Account in full, in line with constitutional provisions, before any operational expenses are deducted. Data submitted to the Federation Account Allocation Committee indicate NNPC deductions of ₦20.739bn in 2022, ₦695.9bn in 2023, ₦452.6bn in 2024, and ₦906.91bn in 2025. The figures show significant year-on-year fluctuations, with 2023 recording a dramatic increase over 2022, followed by a dip in 2024 and another surge in 2025. Monthly records also revealed wide swings in retained earnings, highlighting the volatility of oil sector revenues.
The President’s directive prioritises constitutional fiscal rules over funding mechanisms provided under the Petroleum Industry Act, specifically halting automatic deductions for management fees and frontier exploration prior to revenue remittance. A presidential implementation committee has been established to ensure compliance, with violations to be treated as breaches of lawful executive orders and fiscal provisions.
The order has drawn mixed reactions. State governments and transparency advocates welcomed it as a boost to distributable revenue and fiscal accountability. However, some industry stakeholders raised concerns about possible conflicts with the Petroleum Industry Act. Labour unions, including the Petroleum and Natural Gas Senior Staff Association of Nigeria, called for clarity to ensure production levels and jobs are not affected.
An NNPC official, speaking anonymously, criticised the directive, warning that deepwater assets operate under production sharing contracts where royalties and taxes are remitted in crude rather than cash. He noted that sudden changes could disrupt oversight of 39 production-sharing contract sites and affect 400–500 personnel involved in operations. The official also cited risks to crude-backed loans and investor confidence, stressing that some production barrels are tied to existing loan repayments.
Supporters of the executive order argue that frontier exploration should be financed through the national budget or private investment rather than through automatic deductions from federation revenues, asserting that the move reinforces transparency and ensures constitutional compliance.
President Tinubu Orders Halt to NNPC Pre-Remittance Deductions, Blocking N2.1tn Retained Funds
