The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has rejected claims that gas flare penalty revenues were unaccounted for, saying discrepancies identified by the Auditor-General of the Federation resulted from timing and reconciliation issues involving government agencies.
NMDPRA made the clarification in a statement issued on Tuesday, 8 September 2026, and signed by its Director of Public Affairs, George Ene-Ita.
The response followed findings in the Auditor-General’s 2023/2024 Annual Report on Non-Compliance and Internal Control Weaknesses concerning the Midstream and Downstream Gas Infrastructure Fund (MDGIF), a directorate under NMDPRA.
According to the audit findings reported by The Punch, about N51.09 billion of the roughly N94.4 billion in financial issues identified at the Fund related to alleged under-remittance and under-collection of gas flare penalties in 2023 and 2024.
NMDPRA, however, said MDGIF does not collect gas flare penalties.
Ene-Ita said the statutory responsibility for collecting the penalties rests with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The money is first remitted into the Federation Account before amounts due to MDGIF are transferred through the Federation Account Allocation Committee (FAAC) process.
The Authority said differences between the amounts reported by NUPRC and those recorded by MDGIF therefore reflect the timing and reconciliation of transactions moving through the Federation Account system, rather than unaccounted revenue.
For 2023, the audit report stated that NUPRC reported N140.54 billion in gas flare penalty revenue. After a four per cent collection cost of N5.62 billion, the amount expected to accrue to MDGIF was N134.92 billion.
The Fund accounted for N122.44 billion, leaving a difference of N12.48 billion, which the Auditor-General classified as under-remittance and under-reporting.
A similar discrepancy was identified for 2024. The audit said NUPRC reported N391.26 billion in gas flare penalty revenue. After the four per cent collection cost, N375.61 billion was expected to accrue to MDGIF, while the Fund accounted for N337 billion, producing an alleged difference of N38.61 billion.
The Fund disputed the audit calculations, explaining that the revenue passes through the Federation Account before the net amount is transferred to MDGIF. However, the Auditor-General maintained that the explanation did not sufficiently resolve the findings.
NMDPRA said it has formally written to the Office of the Auditor-General and provided supporting FAAC records for review. It added that reconciliation of revenues accruing to MDGIF remains a joint exercise involving the relevant government agencies.
The Authority also stressed that MDGIF’s role is to receive statutory revenues, not collect them. It therefore said any shortfall that may ultimately be established in the collection process would fall within the responsibility of the relevant collecting agencies.
NMDPRA further defended the Fund’s governance structure, saying MDGIF operates under an Investment Policy Statement and the oversight of its Governing Council, in line with the framework established by the Petroleum Industry Act 2021.
The Auditor-General’s findings and NMDPRA’s response mean the disputed figures remain subject to reconciliation and further review by the relevant government institutions.
