Nigerian govt orders audit of oil revenues after Tinubu’s direct remittance order

IN the wake of President Bola Ahmed Tinubu’s executive order mandating the direct remittance of all oil and gas earnings into the federation account, the federal government has moved to scrutinise past revenue collections across the petroleum sector.

Nigerian authorities are set to examine historical deductions, off-budget retentions, and management fees previously applied to petroleum receipts, with the aim of determining whether any funds are owed back to the federation, ThisDay reported. The directive marks a significant escalation from prospective compliance to a full-scale probe of legacy transactions.

To operationalise the order, the government has formally instructed key institutions, such as Nigerian National Petroleum Company Limited (NNPC Limited), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), to submit comprehensive financial records and grant audit teams unrestricted access to documentation.

The communication, signed by the Minister of State for Finance and Chairman of the Federation Account Allocation Committee (FAAC), Dr Doris Uzoka-Anite, emphasised the immediate halt of all deductions from petroleum revenues before remittance. Entitled ‘Implementation of Presidential Executive Order on Safeguarding Federation Oil and Gas Revenues and Providing Regulatory Clarity – Immediate Remittance Directive and Retrospective Audit,’ the letter reaffirmed Section 162 of the constitution, which requires that all revenues accruing to thefFederation be paid into the federation account without deduction.

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Under the new directive, institutions are to cease collection and management of the 30 percent allocation to the Frontier Exploration Fund (FEF), suspend the 30 percent management fee previously deducted by NNPC from profit oil and gas revenues, and discontinue the payment of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF). All forms of administrative or off-budget deductions deemed inconsistent with the executive order are to stop immediately.

Going forward, profit oil, profit gas, royalty oil, tax oil, gas flare penalties and all related petroleum income streams must be remitted directly into a designated Sub-Federation Account under the supervision of the Office of the Accountant-General of the Federation, pending FAAC distribution. No agency is permitted to net off, retain or deduct funds prior to remittance. Any outstanding balances held in commercial or Central Bank of Nigeria (CBN) accounts are to be transferred once the sub-account is operational.

Beyond ensuring immediate compliance, the government’s most consequential step is the commissioning of a retrospective audit spanning three critical revenue channels.

First is the Frontier Exploration Fund, created under the Petroleum Industry Act (PIA). Auditors will review total collections since inception, expenditure patterns, commitments entered into, as well as current balances and investment placements.

Second is the Midstream and Downstream Gas Infrastructure Fund. The probe will examine gas flare penalties collected over time, how they were transferred and utilised, and whether procurement processes complied with regulatory standards.

Third, the audit will scrutinise the 30 percent management fee previously deducted by NNPC from profit oil and gas revenues. Authorities will assess the cumulative value of these deductions, how retained funds were applied, and whether any outstanding balances are due to the federation.

Other entities directed to cooperate include the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), the Nigeria Revenue Service (NRS), oil contractors and operators across the sector. The ministry warned that where audit findings uncover liabilities, immediate restitution into the proposed Sub-Federation Account would be required.

In addition, affected institutions must submit weekly remittance reports to the Minister of State for Finance. Non-compliance, the directive stressed, would amount to a violation of a lawful executive order and constitutional fiscal provisions.

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NNPC collaboration with Dangote

Meanwhile, in a parallel development within the sector, NNPC Limited has renewed its strategic collaboration with the Dangote Refinery following a high-level visit to the facility in Ibeju-Lekki, Lagos.

Led by its Group Chief Executive Officer, Engr Bayo Ojulari, the NNPC delegation toured the 650,000 barrels-per-day refinery owned by Aliko Dangote. Both organisations reaffirmed their intention to deepen operational and commercial ties in areas spanning refining, trading, shipping and gas supply.

Ojulari described the alliance as a platform to unlock synergies across infrastructure, capital and markets, while Dangote said Nigerians would benefit from the economies of scale and value creation arising from the partnership.

NNPC currently holds a 7.25 percent equity stake in the refinery, a position considered strategic in advancing domestic refining capacity and strengthening Nigeria’s energy security.