The Federal Government has revised how its new oil revenue remittance directive will be carried out, allowing the Nigerian National Petroleum Company Limited to continue lifting and selling crude oil on behalf of the country before paying proceeds into a newly designated account at the Central Bank of Nigeria.

The move follows internal consultations after concerns emerged over the practicality of immediately enforcing Executive Order 9 of 2026, signed by Bola Tinubu. The order mandates that all oil-related earnings including royalties, tax oil, profit oil, and profit gas be paid directly into the Federation Account.

Sources familiar with deliberations said the government is not backing down from the directive but is modifying its rollout to reflect operational realities in the petroleum sector.

Under the updated approach, royalties and tax obligations typically settled in crude oil barrels rather than cash will still be commercialised by NNPC before proceeds are transferred. The funds will pass through a new account overseen by the Office of the Accountant-General of the Federation instead of existing regulatory channels.

Officials explained that the initial directive overlooked the industry practice where government entitlements are received in crude volumes, which must first be sold before revenue is realised.

Executive Order 9 also eliminated the 30 per cent Frontier Exploration Fund provided under the Petroleum Industry Act and discontinued the 30 per cent management fee previously retained from profit oil and gas.

The President had cited revenue leakages and excessive deductions as reasons for the reform, stating that oil earnings meant for federal, state, and local governments must no longer be tied up in layered retention structures.

However, stakeholders have raised concerns that the revised funding structure may weaken the commercial independence granted to NNPC under the Petroleum Industry Act. Industry insiders warn that reverting to a system where the government collects all revenue first and later reimburses operational costs could slow decision-making and create funding bottlenecks.

One official recalled that before the PIA reforms, similar arrangements contributed to multibillion-dollar cash call arrears and strained relationships with industry partners.

There are also fears that tighter fiscal control could affect Production Sharing Contract operations, with hundreds of personnel linked to those activities potentially impacted if funding flows become uncertain. According to industry data, dozens of PSC assets are active nationwide, with a handful contributing the bulk of output under such arrangements.

Meanwhile, Finance Minister Wale Edun confirmed that contractors will continue using the current remittance process pending the release of detailed transition guidelines. A technical subcommittee has been tasked with producing an implementation framework within three weeks to ensure contractual obligations and investor confidence are preserved.

The government also plans to review aspects of the Petroleum Industry Act to address fiscal concerns identified during consultations.

Economic analysts say the policy, if effectively managed, could boost inflows into the Federation Account and increase statutory allocations to federal and state governments. However, they caution that improved revenue collection must be matched with transparent utilisation to deliver tangible development outcomes.

Further meetings between regulators, the Ministry of Finance, and industry operators are expected in the coming days as the government works to finalise the operational template for the revised remittance system.