The Nigerian Midstream and Downstream Petroleum Regulatory Authority has stepped up enforcement of the host community funding requirement under the Petroleum Industry Act 2021, directing operators in the oil and gas midstream and downstream sectors to fully comply with the mandatory three per cent annual contribution meant for oil-producing communities.
The agency also unveiled a digital platform designed to improve monitoring and transparency in how the funds are registered, reported, and managed across the industry.
At a stakeholder engagement session held in Port Harcourt, officials explained that the new system would allow real-time tracking of contributions, project execution, and compliance by license holders. The initiative is aimed at strengthening accountability in the management of community development obligations.
According to the authority, the host community framework was created to ensure that communities affected by petroleum operations receive direct social and economic benefits, including infrastructure and development projects funded by the mandatory levy on operators.
Representing the Authority Chief Executive, a senior official in charge of safety, environment, and community affairs stressed that the digital portal would also simplify governance processes for trustees and management committees overseeing the funds. It is expected to reduce disputes and improve oversight of community development projects.
Lawmakers and stakeholders at the event praised the initiative, noting that pipelines, depots, and other midstream facilities play a key role in Nigeria’s energy system and should deliver visible benefits to surrounding communities.
Community representatives present at the forum welcomed the sensitisation effort, saying it provided clearer understanding of how the scheme works. However, they urged regulators to ensure strict supervision so that the funds are not mismanaged or diverted from their intended purpose.
The regulator maintained that full compliance with the three per cent contribution rule remains compulsory and warned that enforcement actions would be strengthened as the digital tracking system becomes fully operational.
