By Obas Esiedesa, Abuja
ABUJA — The Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, has clarified that the Midstream and Downstream Gas Infrastructure Fund, MDGIF, is not responsible for collecting gas flare penalties, following concerns raised in the 2023/2024 Annual Report of the Auditor-General of the Federation.
The NMDPRA, in a statement signed by its Director of Public Affairs, George Ene-Ita, said gas flare penalties are collected solely by the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, in line with its statutory mandate.
It explained that the funds collected by NUPRC are remitted into the Federation Account, from where allocations are subsequently made to MDGIF’s dedicated account with the Central Bank of Nigeria through the Federation Account Allocation Committee, FAAC.
According to the Authority, the process is documented, with records of the relevant transactions available.
The NMDPRA was reacting to findings contained in the Auditor-General’s report on non-compliance and internal control weaknesses in Ministries, Departments and Agencies, MDAs, particularly those relating to MDGIF.
It said variances identified in gas flare penalty remittances were due to timing and reconciliation issues within the multi-agency Federation Account channel through which the revenues are collected and remitted.
“These variances reflect timing and reconciliation across the multi-agency Federation Account channel through which NUPRC collects and remits these funds, not unaccounted revenue,” the statement said.
The Authority disclosed that MDGIF had formally written to the Office of the Auditor-General of the Federation, submitting supporting FAAC records and requesting a review of the position contained in the report.
It stressed that the Fund’s responsibility was limited to receiving statutory revenues and not collecting them.
“Any shortfall that may ultimately be established falls within the remit of the collecting agencies, not the Fund,” it said.
The NMDPRA added that reconciliation of all monies accruing to MDGIF was a joint exercise involving relevant regulatory institutions in the petroleum sector.
It noted that the reconciliation process was ongoing to ensure that any outstanding amounts were properly accounted for.
On governance, the Authority said MDGIF operated under a governance framework anchored by its Investment Policy Statement and overseen by its Governing Council.
It added that all transactions undertaken by the Fund were duly authorised in accordance with the established framework.
The NMDPRA said MDGIF remained committed to its obligations under Section 52 of the Petroleum Industry Act, PIA, 2021, and welcomed scrutiny of the management of public resources dedicated to Nigeria’s gas infrastructure development.
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