FG starts direct implementation of oil revenues to FAAC under new executive order

The federal government has begun implementing Executive Order 9 of 2026, which mandates that oil revenues be remitted directly to the Federation Account Allocation Committee (FAAC).

The development follows the inaugural meeting of the implementation committee for the order, held on February 26, 2026. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, confirmed the progress in a statement on Monday, highlighting key resolutions from the meeting.

According to Edun, the committee reaffirmed President Bola Tinubu’s directive that all revenues accruing from petroleum operations must adhere to constitutional provisions, safeguard federation earnings, and promote fiscal stability across the three tiers of government.

“In line with the President’s directive, NNPC Limited will immediately stop collecting the 30% management fee and the 30% frontier exploration fund deductions from profit oil and profit gas under Production Sharing Contracts (PSCs),” the statement said. “Additionally, all gas flare penalty payments to the Midstream and Downstream Gas Infrastructure Fund (MDGIF) are suspended immediately, consistent with the Executive Order.”

Addressing Section 2(3) of the order, which requires contractors to make direct payments into the federation account, Edun noted that the committee agreed on a transition period to ensure existing contractual and financing arrangements are respected, while maintaining investor confidence.

“Until detailed guidelines are issued, contractors will continue remitting revenues under the current system,” he said. “The transition period will be guided by clear, standardised procedures to ensure an orderly implementation.”

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The committee also approved the formation of a technical subcommittee tasked with developing detailed transition guidelines within three weeks and reviewing the Petroleum Industry Act (PIA) to address structural and fiscal gaps that undermine federation revenues.

The subcommittee will be chaired by the Special Adviser to the President on Energy and include key officials such as the Solicitor-General of the Federation, the Chairman of the Federal Inland Revenue Service, the Chairman of the Forum of Commissioners of Finance, representatives from the Ministry of Petroleum Resources, and support from the Budget Office of the Federation.