The Midstream and Downstream Gas Infrastructure Fund has rejected an audit query linking it to an alleged N94.4 billion shortfall in gas flare penalty remittances.
The Fund, a directorate under the Nigerian Midstream and Downstream Petroleum Regulatory Authority, said the figures questioned in the 2023/2024 report of the Auditor-General for the Federation were largely the result of differences in timing and reconciliation within the Federation Account system.
The clarification was issued by the NMDPRA Director of Public Affairs, George Ene-Ita, on Tuesday.
The controversy followed the Auditor-General’s report, which highlighted revenue discrepancies and other financial concerns involving government institutions.
However, MDGIF said it does not collect gas flare penalties and therefore cannot be held responsible for any gap in the collection of the funds.
According to the Fund, the Nigerian Upstream Petroleum Regulatory Commission is the agency legally responsible for collecting gas flare penalties. The proceeds are subsequently paid into the Federation Account before allocations are made to MDGIF through the Federation Account Allocation Committee.
The Fund said records covering the movement of the money through the various stages of the process are available and have been submitted to the Auditor-General’s office.
It explained that differences between figures recorded at different stages of the process should not automatically be interpreted as missing revenue.
MDGIF has formally written to the Office of the Auditor-General, providing relevant FAAC documentation and asking that the audit position be reviewed.
The Fund also maintained that its responsibility begins with receiving and managing the statutory allocations rather than collecting the penalties in the first place.
It said any confirmed shortfall arising from the collection or remittance of gas flare penalties should therefore be traced to the agencies responsible for those stages of the process.
The Fund added that reconciliation of revenues due to it is still ongoing, with relevant petroleum-sector institutions involved in the exercise.
Beyond the revenue dispute, MDGIF defended its financial management procedures, saying its investments and transactions are subject to established approval processes and oversight by its Governing Council.
The Fund operates under Section 52 of the Petroleum Industry Act 2021, which provides for investment in critical midstream and downstream gas infrastructure.
MDGIF said it remains committed to its statutory mandate and welcomed scrutiny of its management of public funds.
