MDGIF rejects Auditor-General’s N94.4bn audit query

Nigeria’s Midstream and Downstream Gas Infrastructure Fund has denied responsibility for an alleged N94.4 billion shortfall in gas-flare penalty remittances, saying the figures reflect timing and reconciliation issues rather than missing revenue.

The fund, a directorate of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, responded to the Office of the Auditor-General of the Federation’s 2023/2024 report on non-compliance and internal control weaknesses. The report, as previously reported by PUNCH Online, identified financial irregularities and revenue shortfalls of approximately N94.4 billion.

In a statement issued by NMDPRA Director of Public Affairs George Ene-Ita, the fund said it does not collect gas-flare penalties. Under the statutory framework, the Nigerian Upstream Petroleum Regulatory Commission collects the penalties and remits them to the Federation Account. The Federation Account Allocation Committee then disburses funds to the MDGIF’s dedicated account with the Central Bank of Nigeria during its monthly meetings.

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We wish to clarify that gas flare penalty remittances are collected solely by the Nigerian Upstream Petroleum Regulatory Commission, in line with its statutory responsibility.

“We wish to clarify that gas flare penalty remittances are collected solely by the Nigerian Upstream Petroleum Regulatory Commission, in line with its statutory responsibility,” the statement said. It added that the collections and disbursements were documented and supported by records.

The MDGIF said the audit appeared to compare remittance figures without fully accounting for the movement of funds through the agencies involved. “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 said.

The fund said it had formally written to the Auditor-General’s office, submitted relevant Federation Account Allocation Committee records and requested a review. It added that any shortfall ultimately established in collection or remittance would fall under the responsibility of the collecting agency, not the MDGIF, whose role is limited to receiving statutory revenues.

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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.