Federation earnings from Nigerian National Petroleum Company Limited (NNPC) Production Sharing Contract (PSC) profits dropped by ₦78.71 billion in March 2026 despite a sharp rise in global crude oil prices.
NNPC reports presented at Federation Account Allocation Committee (FAAC) meetings showed that PSC distribution to the Federation Account fell from ₦121.34 billion in February 2026 to ₦42.64 billion in March, representing a 64.9 per cent decline.
The March 2026 figure was also significantly lower than the ₦204.96 billion recorded in March 2025.
This decline occurred despite Brent crude prices rising above $100 per barrel in March due to escalating tensions in the Middle East and concerns over disruptions around the Strait of Hormuz.
Further analysis showed total PSC distribution in the first quarter of 2026 stood at ₦180.05 billion, compared to ₦438.54 billion recorded during the same period in 2025.
The reports also highlighted changes introduced under Executive Order 9 signed by President Bola Tinubu in February 2026.
Under the new policy, all PSC revenues are now remitted directly to the Federation Account, ending deductions previously retained by NNPC for management fees and frontier exploration.
Before the order, PSC profits were shared under a 30:30:40 formula, where only 40 per cent accrued directly to the Federation Account.
Despite the policy shift, total PSC proceeds remained weak, raising concerns over crude production levels, remittance cycles and oil sector efficiency.
The reports also revealed that while NNPC projected ₦813.55 billion in interim dividends for Q1 2026, no remittance was made to the Federation Account.
As a result, total actual inflows stood at ₦180.05 billion against projected oil and gas revenues of ₦1.41 trillion, leaving a shortfall of ₦1.23 trillion.
Speaking on the development, economist and CEO of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said higher oil prices may not immediately reflect in government earnings due to export and remittance timelines.
He also noted that production output and previous forward crude sales agreements entered into by NNPC could be limiting direct inflows into government accounts.
