The Federal Government has commenced the implementation of the Executive Order 9, signed about two weeks ago by President Bola Tinubu.
The order aims to enhance transparency in revenues from oil and gas activities, ensuring they align with the government’s fiscal policy regime and the Constitution with a view to improving revenue distributions to all tiers of government for improved governance.
To ensure effective implementation of the order, the implementation committee held its inaugural meeting last Thursday in Abuja.
During the meeting, the committee members harped on the importance of managing petroleum-derived revenues in ways that would safeguard national interests and prevent revenue losses.
- Advertisement -
According to the order, some of the key changes the committee is expected to effect include an immediate stoppage by the Nigerian National Petroleum Company Limited (NNPCL) of deduction of 30% management fee and another 30% for frontier exploration from profits in oil and gas under production sharing contract (PSC) agreements.
Similarly, payments related to gas flare fines into the Midstream and Downstream Gas Infrastructure Fund have been stopped as stipulated in the presidential directive.
In a statement issued on Monday relating to the implementation of the Executive Order, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, assured: “We are committed to upholding the President’s vision for transparent revenue management.”
The minister stressed that the fiscal measures were designed to protect the federation’s share of petroleum proceeds without compromising ongoing operations.
On the provisions of Section 2, Subsection 3 of the order, which mandated direct deposits of profits, royalties, and taxes by operators in the hydrocarbon resources industry into the federation account, the committee stressed the need for a hitch-free compliance, including the need to honour current contracts and loans to sustain investor confidence in the country.
