FG BEGINS IMPLEMENTATION OF EXECUTIVE ORDER ON DIRECT OIL REVENUES REMITTANCE TO FAAC

He said the committee reaffirmed the president’s directive that revenues accruing to the federation from petroleum operations must be handled in a manner that upholds constitutional principles, protects revenues accruable to the federation, and supports the fiscal stability of the three tiers of government.

“In line with the President’s directive, NNPC Limited shall cease, with immediate effect, the collection of the 30% management fee and the 30% frontier exploration fund deductions from profit oil and profit gas under Production Sharing Contracts (PSCs),” the statement reads.

“Additionally, all remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF) are suspended with immediate effect, in line with the Executive Order.”

Edun mentioned that on Section 2(3) of the order, which allows contractors to send money directly to the federation account, the committee agreed that the change should happen in a way that respects the current contracts and financial agreements, and keeps investors confident.

“The committee approved a set time period for contractors to start sending their profit oil, royalty oil, and tax oil directly to the Federation Account,” the minister said.

“Until the Committee issues detailed guidelines, contractors will continue to remit under the current process. During the transition period, the Committee will issue clear, standardised guidance to ensure an orderly changeover.”

He said the committee approved the establishment of a technical subcommittee to develop detailed transition guidelines within three weeks, and commence a review of the Petroleum Industry Act (PIA) to address structural and fiscal anomalies that weaken 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 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 Petroleum Resources, Oil, with secretarial support from the Budget Office of the Federation,” Edun said.

He added that the committee will continue to provide coordinated guidance and timely updates as implementation progresses, commending stakeholders for their cooperation in advancing efforts to ensure that Nigeria’s petroleum resources deliver measurable benefits to citizens across the federation.