The Midstream and Downstream Gas Infrastructure Fund has rejected allegations that it failed to account for about N94.4bn in gas flare penalty revenues identified in the 2023/2024 audit report of the Auditor-General for the Federation.
The Fund, a directorate under the Nigerian Midstream and Downstream Petroleum Regulatory Authority, said the figures highlighted in the audit report were largely linked to differences in timing and reconciliation within the Federation Account remittance process.
In a statement issued on Tuesday by the NMDPRA’s Director of Public Affairs, George Ene-Ita, the MDGIF maintained that it was not responsible for collecting gas flare penalties.
The Fund explained that the Nigerian Upstream Petroleum Regulatory Commission is the agency legally responsible for collecting the penalties before remitting the proceeds into the Federation Account.
According to the MDGIF, allocations due to it are subsequently released from the Federation Account through the Federation Account Allocation Committee and paid into its dedicated account with the Central Bank of Nigeria.
It said, “Gas flare penalty remittances are collected solely by the Nigerian Upstream Petroleum Regulatory Commission, in line with its statutory responsibility.
The Fund added that the monies were properly documented throughout the remittance process, stressing that records of the transactions were available for verification.
It further stated, “The variances flagged in gas flare penalty remittances reflect timing and reconciliation across the multi-agency Federation Account channel through which NUPRC collects and remits these funds, not unaccounted revenue.”
The clarification followed reports that the Auditor-General’s office had identified financial irregularities and revenue discrepancies estimated at N94.4bn in its latest report.
However, the MDGIF said it had formally engaged the Auditor-General’s office over the findings and submitted relevant Federation Account Allocation Committee records to support its position.
The Fund stressed that its responsibility was limited to receiving and deploying statutory revenues allocated to it, rather than collecting gas flare penalties.
It said, “As MDGIF’s role is limited to receiving statutory revenues rather than collecting them, any shortfall that may ultimately be established falls within the remit of the collecting agencies, not the Fund.”
The agency also disclosed that reconciliation of revenues accruing to the Fund was still ongoing, involving the relevant petroleum sector institutions.
It said the process was aimed at ensuring that any outstanding amounts were properly identified and accounted for.
The MDGIF also defended its financial management structure, saying its investments and transactions were subject to established approval procedures and oversight by its Governing Council.
It maintained that its operations were guided by its Investment Policy Statement and other governance mechanisms.
The Fund said it remained committed to its mandate under Section 52 of the Petroleum Industry Act 2021, particularly the development of critical midstream and downstream gas infrastructure.
It added that the ongoing reconciliation would help resolve differences in the records and provide a clearer picture of gas flare penalty revenues due to the Fund.
The development comes amid growing scrutiny of revenue collection and remittance by government agencies, particularly following the publication of the Auditor-General’s reports, which frequently highlight issues relating to unremitted revenues, financial controls and compliance with public-sector regulations.
