Nigeria’s Auditor-General has raised concerns over approximately N39 billion in alleged under-remittances to the Midstream and Downstream Gas Infrastructure Fund, MDGIF, involving statutory petroleum-product revenue and gas-flare penalties.
The findings were contained in the Auditor-General’s 2024 report and relate to revenue generated during the 2023 financial year.
According to the audit, MDGIF disclosed that N39.89 billion was generated from the 0.5 per cent statutory revenue accruing to the fund from petroleum products sold during the period.
However, only N13.34 billion was reported as remitted to and accounted for by MDGIF, resulting in an alleged shortfall of approximately N26.54 billion.
Audit Raises Questions Over Gas-Flare Revenue
The Auditor-General also raised concerns over remittances from gas-flare penalties.
According to the report, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, disclosed total revenue of N140.54 billion from gas-flare penalties in its 2023 annual report.
After deducting a four per cent cost of collection amounting to approximately N5.6 billion, the report calculated that about N134.92 billion was due to MDGIF.
However, the amount reported as remitted and accounted for by the fund was N122.44 billion.
The difference produced an alleged under-remittance and under-reporting of approximately N12.47 billion.
Combined with the N26.54 billion identified from the statutory petroleum-products revenue, the two components amount to approximately N39 billion.
Gas Infrastructure Fund Has Strategic Role
The questions surrounding the revenue are particularly significant because MDGIF is intended to support investment in Nigeria’s midstream and downstream gas infrastructure.
Nigeria possesses substantial natural gas resources, but developing infrastructure capable of processing, transporting and distributing gas requires considerable investment.
The fund is therefore part of the financing framework intended to support the expansion of gas infrastructure.
Any shortfall in statutory revenue available to it could potentially affect the resources available for those objectives.
NMDPRA Disputes Under-Remittance Claim
The report states that the NMDPRA has denied allegations of under-remittance, creating a dispute between the audit findings and the regulator’s position.
That distinction is important: the figures represent findings raised by the Auditor-General and should not be treated as a final determination of wrongdoing without considering the regulator’s response and any subsequent reconciliation of the accounts.
The central issue will therefore be establishing what amounts were collected, what statutory deductions applied, what was transferred to MDGIF and whether differences in reporting or accounting treatment explain any part of the identified shortfall.
The matter also feeds into wider scrutiny of revenue collection and remittance within Nigeria’s petroleum industry, where transparency over statutory payments remains important to public finances.
Further clarification from the affected agencies will be necessary to reconcile the figures and establish whether the disputed N39 billion represents outstanding revenue, an accounting discrepancy or amounts otherwise accounted for.
