Energy: How policy boldness, EOs, subsidy removal is re-engineering nation’s economic soul

Three years of the oil and gas sector under President Bola Ahmed Tinubu, has revealed a sector that has been transformed to one that is set to drive the new phase of Nigeria’s economic journey; Blueprint.ng correspondent writes.

As Nigeria marks its 66th Independence Anniversary on October 1, 2026, the country stands at a historic crossroads. For over six decades, crude oil has been the bedrock of the national economy, funding infrastructure, driving foreign exchange earnings, and sustaining fiscal budgets.

However, decades of regulatory ambiguity, systemic fraud in subsidy regimes, pipeline vandalism, and dwindling capital inflows severely impaired the sector’s ability to deliver sustainable wealth.

Since May 2023, a major institutional reset has taken place across the oil and gas landscape. Driven by President Bola Ahmed Tinubu’s policy directives, the removal of the decades-long petrol subsidy, and target-driven Executive Orders, the industry has moved from stagnation towards renewed investment, growing domestic refining capacity, and structural growth.

The “Subsidy Gone” Era: Catalysing capital inflows, market freedom

On May 29, 2023, President Tinubu declared in his inaugural address: “The fuel subsidy is gone.”

For decades, the Premium Motor Spirit (PMS) subsidy burdened the national treasury, consuming over ₦4 trillion annually at its peak, depleting foreign reserves, and encouraging cross-border smuggling into neighbouring West African countries.

By removing the subsidy and liberalising the downstream market, the federal government restored commercial viability to the sector. Investors who had shied away from market distortions began returning with capital commitments.

At a press conference in Abuja in June 2023, Farouk Ahmed, then Authority Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), set out the open-market framework:

“As far as we are concerned in the NMDPRA, this is not like before when the PPPRA fixes the price; in a deregulated market, it is the market force that dictates the price.”

He added that the NMDPRA would no longer fix prices or release pricing templates for petrol. The regulator is now led by Rabiu Umar as Authority Chief Executive.

The subsidy removal, alongside the operationalisation of the 650,000 barrels per day Dangote Petroleum Refinery and modular refineries across the Niger Delta, altered the nation’s energy trade dynamics. For the first time in over thirty years, Nigeria began reducing its dependence on imported refined fuels, preserving foreign exchange and laying the foundation for energy self-sufficiency.

Prescription for growth: Executive Orders and institutional efficiency

Beyond fiscal reforms, administrative delays and high transaction costs had historically stifled project execution in the upstream sector. On February 28, 2024, President Tinubu signed an Executive Order and two directives to streamline contracting, introduce fiscal incentives for non-associated gas (NAG) developments, and tighten local content administration.

The impacts of these measures include: Shorter contracting cycles: The directive caps the contracting cycle at not more than six months. The Nigerian Content Development and Monitoring Board (NCDMB) says cycles have been compressed from 18 months to between four and six months; higher approval thresholds: NNPC’s consent under Production Sharing Contracts (PSCs) and Joint Operating Agreements (JOAs) now applies only to contracts of at least $10 million, or the naira equivalent, to adjust for inflation; longer contract durations: Third-party service contract tenures extended to five years; as incentives: Fiscal incentives for non-associated gas projects to drive domestic utilisation; and faster local content approvals: Nigerian Content Plans must be reviewed within 10 days, failing which they are deemed approved.

Addressing stakeholders on the operationalisation of these directives, the Minister of State for Petroleum Resources (Gas), Rt. Hon. Ekperikpe Ekpo, said: “To promote ease of doing business and stimulate the discovery and development of our abundant hydrocarbon resources, Mr. President issued key Executive Orders.

“These directives shorten approval procedures, raise contract thresholds, and provide clear fiscal frameworks. We have aligned industry stakeholders to ensure these policies translate into real economic growth, industrial development, and job creation from our 215 trillion cubic feet of proven gas reserves.”

Implementation, however, remains uneven.

As at May 2026, that execution of the six-month contracting directive was lagging, with industry players pointing to weak regulation and entrenched interests.

Upstream dynamics: Ramp-up in production, FDI

Improved regulatory clarity under the Petroleum Industry Act (PIA) 2021 and security operations along crude export pipelines have supported a recovery in output.

Crude production, excluding condensates, fell as low as 1.23 million barrels per day (mbpd) in early 2024. In August 2026, NUPRC reported combined crude and condensate output of 1,677,777 barrels per day, with crude alone at about 1.50 mbpd, meeting Nigeria’s OPEC quota for the fourth consecutive month. The year’s high so far was about 1.74 mbpd of crude and condensate.

Evaluating these developments, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, stressed that regulatory stability has restored international investor confidence.

“When this administration came in, Nigeria had suffered an investment drought spanning over a decade because of a lack of fiscal and regulatory clarity. President Tinubu provided a stable fiscal and regulatory environment through key policy interventions and the PIA.

From upstream to downstream, Nigeria stayed open for business. We engaged investors, launched new projects, and deepened local content, proving that with the right environment, capital will flow,” Lokpobiri said.

Even the NUPRC, in September 2025 noted that 28 Field Development Plans approved carried “$18.2 billion in CAPEX commitments.” Those approvals included the $5 billion Bonga North deepwater project and the $500 million Ubeta gas project.

The NCDMB has also cited three major final investment decisions within 18 months, including Shell’s $5 billion commitment to Bonga North in December 2024.

Expert analysis: Structural gains and remaining challenges

Industry analysts and academics acknowledge these shifts while pointing to areas that still need focus.

Energy economist and Professor Emeritus at the Centre for Petroleum, Energy Economics and Law (CPEEL), Prof. Wumi Iledare, said the structural setup under the PIA and Executive Orders is sound, but long-term success depends on policy consistency and institutional execution:

“The removal of the subsidy and the issuance of fiscal Executive Orders were necessary policy decisions that saved the Nigerian economy from structural collapse. However, policy design is only twenty percent of the equation; implementation accounts for eighty percent. What we have seen in the last three years is a commendable alignment of fiscal and regulatory frameworks. Going forward, the government must avoid regulatory overlap between the NUPRC and NMDPRA, ensure the operational independence of regulatory bodies, and guarantee that gas commercialization terms remain competitive against global peer markets,” Iledare.

Adefolarin Olamilekan, an economist opined that the present reforms in the oil and gas sector of the economy represents a bold and ambitious policy direction by the Tinubu administration.

According to him, it reflects an attempt to move Nigeria’s economic thinking beyond immediate fiscal pressures and towards long-term strategic investment.

“In an economy where policy discussions are often dominated by short-term revenue needs, reforms of this magnitude suggests that government is beginning to think more deliberately about the economic architecture of Nigeria

“Some of the most consequential economic policies are those whose full benefits emerge gradually through investment, industrial expansion, stronger institutions and increased productive capacity.

“It also has the potential to improve investor confidence. International and domestic investors generally respond to policy clarity, credible institutions, predictable returns and a stable investment environment,” Adefolarin said.

That challenge now falls on Rabiu Umar at the NMDPRA and Mrs Eyesan at the NUPRC to sustain the momentum.

The way forward: Agenda for sustainable growth

Maintaining momentum will require coordinated action in four priority areas: Security and infrastructure protection: Consolidating joint security operations between state agencies and local communities to protect critical crude supply lines (such as the Nembe Creek Trunk Line and Trans-Niger Pipeline) and end crude theft; accelerating domestic gas infrastructure: Fast-tracking midstream projects, including the Ajaokuta-Kaduna-Kano (AKK) pipeline, expanding CNG distribution, and setting fair commercial pricing for power plants and heavy industry; refining self-sufficiency and exports: Supporting both modular refineries and large-scale facilities to make Nigeria the primary refined petroleum hub for West and Central Africa; and strengthening fiscal and institutional governance: Enforcing the PIA transparently, delivering on the six-month contracting cap, and ensuring Host Community Development Trust Funds (HCDTFs) deliver direct benefits to oil-producing communities.

Three years into a bold reform agenda, Nigeria’s oil and gas sector is undergoing a major structural transformation. By removing market-distorting subsidies, streamlining approvals, and incentivising gas development, the federal government has laid the groundwork for sustained economic growth.

As the country celebrates 66 years of independence, policy discipline and institutional consistency will remain essential to converting Nigeria’s vast hydrocarbon resources into lasting prosperity for all citizens.