The Midstream and Downstream Gas Infrastructure Fund (MDGIF) has clarified that gas flare penalty revenues attributed to the Fund are collected by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and remitted into the Federation Account.
The clarification followed findings contained in 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 referenced the MDGIF, a directorate of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
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In a statement signed by the Director of Public Affairs, George Ene-Ita, MDGIF said the collection of gas flare penalties falls solely within the statutory responsibility of the NUPRC.
According to the Fund, the monies collected by the NUPRC are remitted into the Federation Account, after which disbursements are made to the MDGIF’s dedicated account with the Central Bank of Nigeria through the Federation Account Allocation Committee (FAAC) during its monthly meetings.
The Fund said the process was properly documented and that relevant records were readily available.
MDGIF explained that the variances identified in gas flare penalty remittances reflected timing differences and reconciliation issues within the multi-agency Federation Account process, rather than unaccounted revenue.
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The Fund said it 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 its role was limited to receiving statutory revenues and did not include collecting gas flare penalties.
“Any shortfall that may ultimately be established falls within the remit of the collecting agencies, not the Fund,” the statement said.
MDGIF added that reconciliation of all revenues accruing to the Fund was a joint process involving relevant regulatory institutions in the petroleum sector and remained ongoing to ensure that any outstanding amounts were properly accounted for.
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The Fund also said it operates under a governance framework anchored by its Investment Policy Statement and overseen by its Governing Council, with all transactions authorised in accordance with established procedures.
MDGIF reaffirmed its commitment to its obligations under Section 52 of the Petroleum Industry Act 2021 and said it welcomed scrutiny of the management of public resources dedicated to Nigeria’s gas infrastructure development.