NMDPRA denies AGF report of under-remitted gas flare penalties

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has denied the report of alleged under-remitted gas flare penalties 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.

The rebuttal was contained in a statement signed by George Ene-Ita, Director, Public Affairs Department, NMDPRA, on Tuesday.

The development followed a report by Punch which cited that the Auditor-General of the Federation (AGF) had flagged financial irregularities and revenue gaps amounting to an alleged N94.4 billion at the Midstream and Downstream Gas Infrastructure Fund (MDGIF).

What the NMDPRA is saying

The NMDPRA stated that, concerning the AGF report against MDGIF, a directorate of the Authority said, “We wish to clarify that gas flare penalty remittances are collected solely by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), in line with its statutory responsibility.”

The authority stated that the collections are then remitted into the Federation Account, from which disbursements are made to MDGIF’s dedicated account with the Central Bank of Nigeria through the Federation Account Allocation Committee (FAAC) at its monthly meetings.

The authority added that this process is well documented, with records readily available.

• The authority maintained that 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.”

It added that the Fund had formally written to the Office of the Auditor-General of the Federation, with supporting Federation Account Allocation Committee (FAAC) records, to request a review of the position.

• “It must also be stressed that, 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.
• “Reconciliation of all monies accruing to MDGIF is a joint undertaking involving the relevant regulatory institutions within the sector, and this process remains ongoing to ensure that outstanding amounts are properly accounted for,” the statement partly reads.

The authority explained that the MDGIF operates under a governance architecture anchored by its Investment Policy Statement and overseen by its Governing Council, adding that all transactions are duly authorised in accordance with this framework.

It added that the Fund 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.

Backstory

Recall that President Bola Tinubu, in February 2026, signed an Executive Order suspending the collection of management and frontier exploration fees by the Nigerian National Petroleum Company Limited (NNPCL) and directed the full remittance of oil and gas revenues to the Federation Account.

• The order also halted payments of gas flare penalties into the Midstream Gas Infrastructure Fund.
• It clarified the delineation of responsibilities between the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, while establishing an inter-agency implementation committee chaired by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, to ensure seamless execution.
• The Finance Ministry had said that the Executive Order was aimed at safeguarding revenues due to the Federation and preventing deductions at source under existing fiscal arrangements.

The Executive Order took immediate effect and was described as an interim corrective measure pending legislative amendments to entrench the reforms in law.

What you should know

In August 2026, President Bola Tinubu charged the management of Nigeria Liquefied Natural Gas (NLNG) to turn the nation’s gas reserves into economic benefits after Nigeria flared more than 203.9 billion standard cubic feet of natural gas in 2025.

• According to the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) full-year 2025 Gas Production Status Report, the country flared more than 203.9 billion standard cubic feet of natural gas in 2025, even as overall gas utilisation remained above 92%.
• NUPRC data showed that total gas production in 2025 stood at about 2.71 trillion standard cubic feet, comprising 1.46 trillion scf of associated gas and 1.25 trillion scf of non-associated gas. Of this volume, roughly 2.50 trillion scf was utilised across field operations, domestic supply and exports.

The gas flared in 2025 represented 7.54% of total gas produced during that year.

The development marked an increase from the 192.9 billion scf recorded in 2024, despite regulatory pressure and flare commercialisation initiatives.