The Nigerian Midstream and Downstream Petroleum Regulatory Authority has dismissed claims that Midstream and Downstream Gas Infrastructure Fund under-remitted N51.09 billion in gas flare penalties, saying the discrepancy arose from an ongoing reconciliation process involving multiple government agencies.

The clarification follows findings in the Office of the Auditor-General of the Federation’s 2023/2024 Annual Report on Non-Compliance and Internal Control Weaknesses, which raised concerns over alleged under-remittance and under-collection of gas flare penalties in 2023 and 2024.

In a statement yesterday in Abuja, the NMDPRA explained that the Nigerian Upstream Petroleum Regulatory Commission was solely responsible for collecting gas flare penalties under the Petroleum Industry Act (PIA).

According to the regulator, the funds are first paid into the Federation Account before transfer to the MDGIF’s dedicated account at the Central Bank of Nigeria (CBN) through the Federation Account Allocation Committee’s (FAAC) monthly disbursement process.

The authority maintained that the variance identified by the Auditor-General reflected timing differences and reconciliation issues within the multi-agency remittance process rather than missing or unaccounted revenue.

It disclosed that the MDGIF had formally written to the Office of the Auditor-General of the Federation, submitting FAAC records to support its position and requesting a review of the findings.

The NMDPRA stressed that the Fund only receives statutory allocations and does not collect gas flare penalties directly, adding that any confirmed revenue shortfall would fall within the responsibility of the collecting agencies.

The authority said reconciliation of revenues accruing to the Fund remains a joint exercise involving relevant regulatory institutions to ensure all outstanding amounts are properly accounted for.

It also maintained that the MDGIF operates under a governance framework backed by its Investment Policy Statement and supervised by its Governing Council, with all transactions carried out in line with the PIA.