Nigeria's FAAC now receives 100% of PSC oil profits after Tinubu's Executive Order 9

President Tinubu signed Executive Order 9 in February 2026, directing NNPCL to remit 100% of Production Sharing Contract (PSC) oil revenues into the Federation Account for distribution through FAAC to federal, state, and local governments.

Under the previous Petroleum Industry Act formula, only 40% of PSC profits reached FAAC. In Q1 2025, N263.12 billion was deducted from N438.54 billion in PSC profits before any distribution, covering NNPCL management fees and frontier exploration funding.

From February 2026, NNPCL's management fee deductions and frontier exploration funding deductions from PSC revenues have been suspended, and FAAC shared N2.036 trillion among the three tiers of government for March 2026.

The immediate signal is that state and local governments across Nigeria now have access to a significantly larger share of oil revenues. This is a structural shift that could meaningfully ease the fiscal pressure many state governments have faced from rising debt and spending obligations.

Over the coming months, governors and state finance commissioners should expect higher FAAC allocations, which may reduce reliance on borrowing for recurrent expenditure in the near term.

However, it is too early to know whether NNPCL's suspended activities, particularly frontier exploration funding, will create longer-term gaps in upstream investment, but the signal to watch is whether the federal government introduces alternative funding mechanisms for exploration outside the FAAC framework.