The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has rejected claims of under-remitted gas flare penalties involving the Midstream and Downstream Gas Infrastructure Fund (MDGIF), saying the alleged revenue variances cited by the Auditor-General of the Federation reflect timing and reconciliation issues rather than unaccounted funds.
The clarification followed the Office of the Auditor-General of the Federation’s 2023/2024 Annual Report on Non-Compliance and Internal Control Weaknesses in Ministries, Departments and Agencies, which was reported to have flagged financial irregularities and revenue gaps of about ₦94.4 billion involving MDGIF.
In a statement signed by George Ene-Ita, Director, Public Affairs Department, NMDPRA, the Authority said MDGIF does not collect gas flare penalties. Instead, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is responsible for collecting the penalties in accordance with its statutory mandate.
NMDPRA explained that the penalties collected by NUPRC are remitted into the Federation Account, after which funds due to MDGIF are disbursed into the Fund’s dedicated account with the Central Bank of Nigeria through the Federation Account Allocation Committee (FAAC) during its monthly meetings.
“We wish to clarify that gas flare penalty remittances are collected solely by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), in line with its statutory responsibility,” the Authority said.
According to NMDPRA, the process is supported by documented records, while the variances identified by the Auditor-General are attributable to the timing and reconciliation of transactions passing through the multi-agency Federation Account system. It said the issue should therefore not be interpreted as evidence of unaccounted revenue.
The Authority added that MDGIF had formally written to the Office of the Auditor-General with supporting FAAC records and requested a review of the position. It stressed that because the Fund’s role is limited to receiving statutory revenues rather than collecting them, any shortfall ultimately established would fall within the responsibility of the collecting agencies.
The dispute comes against the backdrop of a February 2026 Executive Order by President Bola Tinubu that suspended the collection of management and frontier exploration fees by NNPC Limited and directed the full remittance of oil and gas revenues into the Federation Account. The order also halted the payment of gas flare penalties into the Midstream Gas Infrastructure Fund and sought to clarify the respective responsibilities of NUPRC and NMDPRA.
The revenue issue is particularly significant given Nigeria’s persistent gas-flaring challenge. NUPRC’s 2025 Gas Production Status Report showed that the country produced about 2.71 trillion standard cubic feet (scf) of gas during the year, while more than 203.9 billion scf was flared, representing 7.54 per cent of total production. Although overall gas utilisation remained above 92 per cent, the volume flared increased from 192.9 billion scf in 2024.
NMDPRA maintained that MDGIF operates under a governance framework anchored by its Investment Policy Statement and overseen by its Governing Council, with transactions authorised in accordance with the established framework. It said the Fund remains committed to its obligations under Section 52 of the Petroleum Industry Act 2021 and welcomed scrutiny of public resources earmarked for Nigeria’s gas infrastructure development.