“We don’t collect gas flare penalties, NUPRC does, says downstream regulator, requests review by Auditor-General
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has rejected findings in the Office of the Auditor-General of the Federation’s 2023/2024 Annual Report alleging under-remittance of gas flare penalty revenues to the Midstream and Downstream Gas Infrastructure Fund (MDGIF).
The NMDPRA, in a statement signed by its Director of Public Affairs, George Ene-Ita, said the audit findings failed to account for the multi-agency process through which gas flare penalty revenues are collected and eventually allocated to the Fund.
According to the Authority, the collection of gas flare penalties is the statutory responsibility of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), not the MDGIF.
It explained that the penalties collected by the NUPRC are first remitted into the Federation Account, after which allocations 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.
NMDPRA said the process is fully documented, with records available to support the transactions.
“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 Authority stated.
The clarification followed concerns raised in the Auditor-General’s annual report over alleged non-compliance and internal control weaknesses relating to the MDGIF, a directorate of the NMDPRA.
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The Authority said the Fund had formally written to the Office of the Auditor-General of the Federation, submitting relevant FAAC records and requesting a review of the audit position.
It further stressed that the MDGIF’s responsibility is limited to receiving statutory revenues and does 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 NMDPRA said.
However, the Authority acknowledged that reconciliation of all revenues accruing to the MDGIF remains an ongoing process involving relevant regulatory institutions in the petroleum sector.
It said the exercise was aimed at ensuring that all outstanding amounts are properly accounted for.
Defending the Fund’s financial governance, NMDPRA said the MDGIF operates under an established governance structure anchored by its Investment Policy Statement and overseen by its Governing Council.
It added that transactions undertaken by the Fund are duly authorised in line with the approved governance framework.
The Authority also reaffirmed its commitment to complying with Section 52 of the Petroleum Industry Act, 2021, which provides the statutory framework for the Fund.
“NMDPRA takes its obligations under Section 52 of the Petroleum Industry Act 2021 seriously and welcomes the scrutiny that accompanies the management of public resources dedicated to Nigeria’s gas infrastructure agenda,” it said.
Victor Ezeja is a Nigerian journalist skilled in producing insightful news analyses, feature stories, and interviews that simplify complex issues and drive informed public discourse. His work combines rigorous research, balanced reporting, and compelling storytelling to highlight developments shaping industries and society. Victor, who holds a Master's Degree in Mass Communication, specializes in energy, aviation, business, and economic reporting. He can be reached via @VICTOREZEJA on X