The executive order issued by President Bola Tinubu stopping the deduction of management fees and the Frontier Exploration Fund by the Nigerian National Petroleum Company (NNPC) has effectively halted revenue streams that generated about ₦2.076 trillion in four years.
An analysis of monthly earnings submitted to the Federation Account Allocation Committee (FAAC) on Wednesday revealed that the national oil company received ₦20.739 billion from the deductions in 2022, ₦695.9 billion in 2023, ₦452.6 billion in 2024, and ₦906.91 billion in 2025, bringing the total to about ₦2.1 trillion between 2022 and 2025.
This development followed the President’s directive that all revenues due to the federation must be remitted in full, without prior deductions, in line with constitutional fiscal provisions and transparency reforms in the oil and gas sector.
The order, which prioritises constitutional fiscal provisions governing the Federation Account over certain operational funding arrangements under the Petroleum Industry Act, specifically halts automatic deductions such as management fees and contributions to the Frontier Exploration Fund from oil and gas revenues before remittance, insisting that all earnings must first be paid into the Federation Account in line with the Constitution.
The move has sparked varying reactions. State governments and fiscal transparency advocates have welcomed the order, saying it will boost distributable revenues, strengthen accountability, and address longstanding concerns about opaque deductions.
However, industry players and legal analysts warn that the order could create tensions between statutory provisions of the Petroleum Industry Act and constitutional fiscal rules, potentially leading to policy uncertainty.
They argue that frontier exploration and joint venture funding mechanisms were designed to support reserve growth and operational efficiency, and caution that abrupt changes could slow investments and affect production if alternative funding models are not provided.
Labour groups, including the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), have called for clarity on the implementation framework, insisting that reforms must not disrupt production or job security. They also urged the government to design a transparent funding mechanism for critical industry projects while ensuring strict oversight of remittances.
Overall, stakeholders agree that the success of the executive order will depend on transparency, disciplined implementation, and the ability of the government to balance fiscal reforms with sustained oil and gas investment.
A presidential implementation committee has been directed to oversee and coordinate the effective implementation of the new directive on oil and gas revenue remittance.
Further analysis of the four-year trend showed sharp fluctuations in the deductions retained by the NNPC. In 2022, the company received ₦20.739 billion from management fees, frontier funds, and services-related deductions. This rose to ₦695.9 billion in 2023, representing an increase of ₦675.161 billion or an extraordinary 3,255.4 per cent year-on-year growth, reflecting a major expansion in retained earnings.
However, in 2024, the amount dropped significantly to ₦452.6 billion, representing a decline of ₦243.3 billion compared to 2023, a sharp 34.96 per cent decrease. The downward trend was reversed in 2025 when deductions surged to ₦906.91 billion, an increase of ₦454.31 billion over 2024, translating to a dramatic 100.37 per cent year-on-year increase.
Comparing 2025 with 2022, the retained deductions rose by ₦886.171 billion, representing a cumulative increase of about 4,271.6 per cent over the period and a total of ₦2.1 trillion.
The data underscored not only the scale of the deductions but also the volatility in annual retention levels, a factor that has intensified debate over the recent executive directive mandating full remittance of oil and gas revenues to the Federation Account before any operational charges.
The PUNCH