Tinubu Redirects N14.57tn Oil Revenues to Federation Account

An Executive Order signed by President Bola Tinubu may significantly boost revenue allocations to the Federal Government, states and local government councils, with projections indicating an additional N14.57 trillion could flow directly into the Federation Account.

The directive mandates that all revenues due to the Federation under production sharing contracts, profit sharing contracts and risk service contracts—including royalty oil, tax oil, profit oil, profit gas and other related earnings—be paid directly into the Federation Account. An analysis of revenue inflows for 2025, based on monthly earnings submitted to the Federation Account Allocation Committee (FAAC) and obtained in Abuja, shows that substantial oil and gas revenues previously retained or managed by various agencies will now be centrally remitted. According to the figures, the Nigerian National Petroleum Company (NNPC) is projected to remit about N906.91 billion in management fees and frontier exploration funds. In addition, oil and gas royalties totalling N7.55 trillion, as well as gas flaring penalties amounting to N611.42 billion collected by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), will be paid directly into the Federation Account under the new order. The revenue restructuring also affects tax collections. The Nigeria Revenue Service will no longer retain authority over the collection of Petroleum Profits Tax and Hydrocarbon Tax, which together generated N4.905 trillion in 2025. Furthermore, the Midstream and Downstream Gas Infrastructure Fund recorded N596.61 billion within the same period. In total, the affected revenue streams amount to approximately N14.57 trillion, which analysts say could substantially increase monthly FAAC disbursements to the three tiers of government. Policy experts note that the Executive Order is expected to enhance transparency and accountability in oil and gas revenue management, while strengthening the Federation Account in line with constitutional provisions. However, they also point out that implementation details and inter-agency coordination will be critical to ensuring smooth remittances and avoiding revenue disruptions.