Tinubu orders overhaul of Oil, Gas revenue remittances

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Barbara Bako, Abuja.

The Federal Ministry of Finance has announced that President Bola Tinubu has signed a new Executive Order to tighten oversight of oil and gas revenue flows, strengthen fiscal transparency and ensure compliance with constitutional provisions on resource earnings.

The ministry of finance in a statement said that the directive is designed to align revenue management in the petroleum sector with the 1999 Constitution, which vests ownership of mineral resources in the Federation and requires proceeds to be paid into the Federation Account for appropriation.

The order introduces immediate changes to certain arrangements under the Petroleum Industry Act 2021 that officials say have led to off-budget deductions and reduced inflows into the Federation Account.

Among the measures, the government has suspended the collection of management and frontier exploration fees by Nigerian National Petroleum Company Limited.

It also directed that taxes, royalties and profit oil from Production Sharing Contracts be paid directly to designated fiscal authorities.

In addition, gas flare penalty payments to the Midstream Gas Infrastructure Fund have been put on hold, while the roles of Nigerian Upstream Petroleum Regulatory Commission and Nigerian Midstream and Downstream Petroleum Regulatory Authority have been further clarified to reduce overlaps and improve regulatory certainty for investors.

An inter-agency committee chaired by the Minister of Finance and Coordinating Minister of the Economy will supervise implementation.
The ministry said the action follows persistent declines in oil and gas revenue remittances despite higher production levels and relatively favourable prices.

The shortfalls, it noted, have affected government’s ability to meet budgetary commitments and fund public services.

Officials added that the reforms come at a time of rising demand for jobs, education, healthcare and infrastructure, driven by the country’s youthful population, as well as increasing competition for energy investment globally.

The Executive Order takes immediate effect and will serve as a temporary measure pending possible legislative amendments.

Authorities say the goal is to improve fiscal discipline, protect revenue integrity and ensure the country’s hydrocarbon resources deliver broader economic benefits to Nigeria and its citizens.