GCEO NNPC Ltd, Mr Bashir Bayo Ojulari Photo: NNPCL Federation oil earnings from Nigerian National Petroleum Company Limited’s Production Sharing Contract profit distribution fell by N78.71bn in March 2026, despite a strong rally in global crude oil prices during the month, an analysis of NNPC reports presented at Federation Account Allocation Committee meetings has shown.
The reports, obtained by Sunday PUNCH, showed that PSC total distribution to the Federation Account dropped from N121.34bn in February 2026 to N42.64bn in March 2026, representing a decline of 64.9 per cent month-on-month. The March 2026 figure was also significantly lower than the N204.96bn recorded in March 2025, indicating a year-on-year drop of N162.33bn or 79.2 per cent.
The decline came despite rising international crude oil prices in March 2026, driven by escalating geopolitical tensions in the Middle East and concerns over disruptions to global oil supply routes. According to the US Energy Information Administration, Brent crude prices climbed sharply during the first quarter of 2026, crossing the $100 per barrel mark on March 12 and closing the quarter at around $118 per barrel after renewed military tensions in the Middle East and fears surrounding the Strait of Hormuz.
However, the higher prices failed to translate into stronger Federation oil earnings from PSC proceeds. Further analysis of the reports showed that total PSC distribution in the first quarter of 2026 stood at N180.05bn, compared with N438.54bn in the corresponding period of 2025, indicating a year-on-year decline of N258.49bn or 58.9 per cent.
The Q1 2026 figure also fell short of the N592.10bn budget projection by N412.05bn. Sunday PUNCH further observed that PSC distribution declined from N105.91bn in January 2025 to N16.07bn in January 2026. In February, receipts dipped from N127.67bn in 2025 to N121.34bn in 2026 before plunging further to N42.64bn in March 2026 from N204.96bn in March 2025.
The reports also revealed a major structural change in the distribution framework following Executive Order 9 signed by President Bola Tinubu in 2026. Under the 2025 structure, PSC profits were shared using the Petroleum Industry Act-prescribed 30:30:40 formula.
Out of the N438.54bn PSC profit recorded in Q1 2025, N131.56bn was deducted as NNPC management fee, another N131.56bn was allocated to frontier exploration funds, while only N175.42bn, representing 40 per cent of the total, accrued directly to the Federation Account as the Federation’s share of PSC.
This means NNPC-related deductions totalled N263.12bn in the first quarter of 2025. However, the 2026 report showed that the Federation’s share of PSC had risen to 100 per cent, with no separate deductions for NNPC management fees or frontier exploration. The report specifically noted that “from February 2026, PSC distribution is in compliance with Executive Order 9 2026.” Tinubu’s Executive Order 9, signed in February 2026, mandates that oil and gas revenues due to the Federation be remitted directly into the Federation Account, limiting deductions and retentions by agencies and directing that key statutory inflows be paid in full before any spending or appropriation.
The order scrapped the 30 per cent Frontier Exploration Fund under the PIA and discontinued the 30 per cent management fee on profit oil and profit gas retained by the NNPC. Effective February 13, 2026, the directive is intended to safeguard oil and gas revenues and strengthen remittances to the Federation Account.
According to the directive, the President invoked Section 5 of the Constitution of the Federal Republic of Nigeria (as amended), anchored on Section 44(3), which vests ownership and control of all minerals, mineral oils, and natural gas in the Government of the Federation.