The Federal Government on Monday stopped the Nigerian National Petroleum Company (NNPC) Limited’s 60 per cent deductions from profit oil under Production Sharing Contracts (PSCs), in a major move to strengthen oversight of petroleum revenues and boost remittances into the Federation Account.
The decision was reached at the inaugural meeting of the Implementation Committee for Executive Order 9, recently signed by President Bola Ahmed Tinubu, as part of broader efforts to address revenue leakages and improve transparency in the oil and gas sector.
Key decisions reached include stopping NNPC Limited from collecting the 30% management fee and 30% frontier exploration fund deductions from profit oil and gas under Production Sharing Contracts with immediate effect. Gas flare penalties remittances into the Midstream and Downstream Gas Infrastructure Fund have also been suspended.
Contractors will now make direct payments of profit oil, royalty oil, and tax oil into the Federation Account, but with a transition period to respect existing contracts and maintain investor confidence, while a Technical Subcommittee has been set up to develop guidelines for the transition and review the Petroleum Industry Act to address revenue weaknesses.
The Implementation Committee, chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, assured stakeholders of continued coordination and regular updates while commending their cooperation in ensuring that Nigeria’s petroleum resources yield greater benefits for citizens nationwide
