Federation oil earnings from the Nigerian National Petroleum Company Limited Production Sharing Contract (PSC) profit distribution declined by N78.71bn in March 2026 despite a sharp increase in global crude oil prices during the same period.
Reports presented at Federation Account Allocation Committee meetings and obtained by Sunday PUNCH showed that total PSC 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. The figure was also significantly lower than the N204.96bn recorded in March 2025.
The decline occurred despite Brent crude prices rising above $100 per barrel during the first quarter of 2026 amid escalating tensions in the Middle East and fears of disruptions to global oil supply routes.
Further analysis showed that total PSC distribution for the first quarter of 2026 stood at N180.05bn, compared to N438.54bn recorded during the same period in 2025, indicating a decline of N258.49bn.
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The reports also revealed major changes in Nigeria’s oil revenue sharing framework following Executive Order 9 signed by President Bola Ahmed Tinubu in February 2026.
Under the previous arrangement, PSC profits were shared using a 30:30:40 formula, with deductions made for NNPC management fees and frontier exploration funds before the Federation received its share. However, the new directive abolished those deductions and mandated full remittance of PSC revenues into the Federation Account.
Despite the reforms, actual oil revenue inflows remained weak. Reports indicated that while projected oil and gas revenue from NNPC for Q1 2026 stood at N1.41tn, actual inflows amounted to only N180.05bn, leaving a shortfall of about N1.23tn.
Economic experts attributed the situation to factors such as low production output, delayed remittance cycles, crude lifting arrangements and previous forward oil sales agreements entered into by the NNPC.
Speaking on the development, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, noted that oil revenue performance depends not only on global prices but also on production levels and remittance structures within the sector.
He added that previous forward crude sales used to finance refinery rehabilitation projects may still be affecting the direct inflow of oil revenues into government accounts.