FG Orders Direct Transfer Of Oil Revenues To FAAC Under New Executive Directive
The Federal Government has commenced the implementation of Executive Order 9 of 2026, mandating the direct remittance of oil revenues to the Federation Account Allocation Committee (FAAC).
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this in a statement on Monday after a meeting of the implementation committee set up following a directive by President Bola Tinubu.
According to Edun, the committee reaffirmed the President’s instruction that all revenues accruing to the federation from petroleum operations must be managed in line with constitutional provisions and in a way that safeguards funds meant for the three tiers of government.
He stated that in line with the directive, NNPC Limited will cease immediately the collection of the 30 per cent management fee and the 30 per cent frontier exploration fund deductions from profit oil and profit gas under Production Sharing Contracts.
The committee approved a defined transition period to operationalise direct payments by contractors of profit oil, royalty oil, and tax oil into the Federation Account.
The statement explained that until detailed guidelines are issued, contractors will continue to remit funds under the current process. During the transition, clear and standardised guidance will be provided to ensure an orderly changeover.
Edun further revealed that a technical subcommittee has been established to develop detailed transition guidelines within three weeks. The subcommittee will also begin a review of the Petroleum Industry Act to address structural and fiscal anomalies affecting federation revenues.
The Technical Subcommittee will be led by the Special Adviser to the President on Energy and will include the Solicitor-General of the Federation and Permanent Secretary of the Federal Ministry of Justice, the Chairman of the Nigeria Revenue Service, and the Chairman of the Forum of Commissioners of Finance. Representatives of the Minister of State for Petroleum Resources (Oil) will also participate, with the Budget Office of the Federation providing secretarial support.
Additionally, all remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund are suspended with immediate effect in line with the Executive Order.
On Section 2(3) of the order, which provides for direct payments by contractors into the Federation Account, the minister said the committee agreed that the transition must respect existing contractual and financing arrangements while maintaining investor confidence.
He added that the committee will continue to provide coordinated guidance and timely updates as implementation progresses, while commending stakeholders for their cooperation in ensuring that Nigeria’s petroleum resources deliver measurable benefits to citizens across the federation.