Nigerian President Bola Tinubu has signed an executive order aimed at preventing wasteful spending in the oil and gas sector, removing overlapping structures and making sure resources are allocated for the benefit of Nigerians, according to the Guardian.

With the new order in place, the Nigerian National Petroleum Co. Ltd. (NNPCL) will no longer be allowed to collect a 30% Frontier Exploration Fund, or a 30% management fee typically applied on top of oil and gas profits.

In the past, these deductions would hold back a significant amount of the government’s oil revenue, despite existing funds being adequate to support NNPCL operations. Tinubu’s new order will now make sure all payments, including taxes, profit gas, profit oil, gas flare penalties, and royalties, go straight into government coffers – allowing all parts of the state, both federal and local, to receive adequate funding.

The new executive order also highlighted concerns around the structure of the Petroleum Industry Act (PIA), which had created numerous overlapping deductions that allowed the NNPCL to influence costs while also acting as a commercial entity. The removal of such fees should see an increase in transparency, the reduction of leakages, and a change to the NNPCL that will see it operate strictly as a purely commercial company.

Speaking on the changes, Tinubu noted that the reforms would help support national budgeting, economic stability, social development, and debt sustainability. He also expressed that a review of the PIA would take place together with stakeholders to discuss “structural and fiscal anomalies”.

Having taken effect on February 13, the execution of the new bill was overseen by a committee of ministers, the budget office, the Nigeria Revenue Service, and NNPCL representatives, and has marked the start of a new era of accountability with increased transparency within the state-owned petroleum company.