In what is being described as the most aggressive fiscal move of his presidency, President Bola Tinubu has signed Executive Order No. 9 of 2026, a directive that effectively dismantles the “middleman” role of the Nigerian National Petroleum Company Limited (NNPC) in revenue collection.
Signed on February 13, 2026, the order mandates that all oil and gas revenues—including royalties, tax oil, and profit oil—must now be paid directly into the Federation Account. This move effectively ends the era of “layered deductions” that have historically seen billions of dollars trapped within NNPC accounts before reaching the three tiers of government.
The “₦15 Trillion” Windfall
The impact on state and local governments is expected to be immediate and massive. Under the previous Petroleum Industry Act (PIA) framework, the NNPC retained a 30% management fee and an additional 30% for Frontier Exploration. Executive Order 9 scraps both.
Analysis from the Budget Office suggest this shift could inject an additional ₦14.57 trillion into the Federation Account annually. For a state like Lagos, which already receives the highest statutory allocation (averaging ₦60 billion monthly in late 2025), this reform could see monthly inflows jump by an estimated 25–35%.
The Pros and Cons of Order No. 9
While the presidency hails this as a “constitutional restoration,” the move has sent shockwaves through the oil industry and the hallowed halls of the NNPC.
The Pros: Transparency and “True Federalism”
- Direct Remittance: By bypassing the NNPC, the government eliminates the “black box” of deductions. States will now know exactly what is earned at the wellhead.
- Fiscal Stability: With ₦15 trillion redirected to the public pool, the government gains significant leverage to fund the 2026 budget without excessive borrowing.
- Empowering LGAs: Following the Supreme Court ruling on local government autonomy, this windfall will land directly in the accounts of the 774 LGAs, potentially sparking grassroots development if managed well.
The Cons: Corporate Instability and “Politicized” Oil
- NNPC Devaluation: Financial experts warn that stripping NNPC of its management fees undermines its goal of becoming a commercially viable, IPO-ready entity like Saudi Aramco. Without predictable cash flow, its credit rating may plummet.
- Frontier Stagnation: The abolition of the Frontier Exploration Fund may halt oil search efforts in the North (Lake Chad and Benue Trough), which critics argue could deepen regional economic imbalances.
- Worker Backlash: PENGASSAN has already rejected the order, warning that defunding the NNPC’s operations could lead to massive job losses in the upstream sector.
