The Nigerian Midstream and Downstream Petroleum Regulatory Authority has come under fresh scrutiny after the Office of the Auditor-General for the Federation uncovered over N432bn in unpaid debts, statutory levies and other outstanding obligations involving petroleum marketers.

The bulk of the liabilities, N431.01bn, consisted of legacy National Transport Average and bridging allowance debts owed to the petroleum sector regulator by marketers, according to the recently released Auditor-General’s 2024 Annual Report on Non-Compliance and Internal Control Weaknesses in Ministries, Departments and Agencies.

The report obtained from the OAGF office on Monday disclosed that Federal Government Ministries, Departments and Agencies were linked to at least N1.39tn in recurring financial irregularities, control failures and breaches of public finance regulations in 2024.

The amount, representing the cumulative value of 30 monetary cross-cutting issues identified by the Office of the Auditor-General for the Federation, underscores the scale of recurring weaknesses in the management of public funds across government institutions.

The largest component of the audit queries was N882.75bn in unrecovered debts involving six MDAs, accounting for about 63 per cent of the total amount implicated in the cross-cutting issues.

The Transmission Company of Nigeria accounted for the largest portion of the unrecovered debts, with N446.70bn, according to the report. The Nigerian College of Aviation Technology, Zaria, recorded the least amount among the affected agencies, with N935.56m.

For the NMDPRA, the report showed that the massive outstanding debt had remained substantially unresolved years after it was incurred, with auditors stating that as of August 2025, there was no evidence that the position had changed.

The N431.01bn debt dwarfed other financial irregularities identified at the authority, including N1.06bn in outstanding statutory levies owed by 14 oil marketers and N217.84m in unremitted Industrial Training Fund contributions.

An analysis of the audit findings showed that the N431.01bn legacy debt accounted for virtually all the N432.29bn in major outstanding financial issues identified in the sections of the report relating to the NMDPRA.

The Auditor-General said the N431.01bn represented accumulated indebtedness arising from the National Transport Average, bridging allowance and legacy obligations.

A breakdown of the debt showed that the Depot and Petroleum Products Marketers Association of Nigeria accounted for N315.18bn, comprising N132.56bn in bridging allowance debt and N182.62bn in National Transport Average obligations.

The Major Energy Marketers Association of Nigeria accounted for another N106.30bn, while N9.53bn represented an unissued legacy debt in promissory notes by the Federal Ministry of Finance.

The report stated, “Section 47(1) of the Petroleum Industry Act (2021) states, “The Authority shall maintain a Fund (in this Act referred to as “the Authority Fund”) into which money accruing to the Commission shall be paid. Audit observed that: i. The sum of N431,012,935,018.88 was the National Transport Average, legacy debt and bridging allowance indebtedness to NMDPRA as at May 2023.”

It added that, “As at the time of this audit in August, 2025, nothing came to the knowledge of the auditors to have changed the position of the amount of the indebtedness, and There was no justification provided for non-recovery of the third parties’ indebtedness to the Authority.”

The auditors further said, “The above anomalies could be attributed to weaknesses in the internal control system at the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Abuja.

The Office of the Auditor-General attributed the anomaly to weaknesses in the NMDPRA’s internal control system and warned that the situation exposed government funds to possible loss and diversion.

Although the NMDPRA acknowledged the outstanding liabilities, the authority described the N431.01bn as legacy receivables due from marketers.

“Management notes that the sum of N431,012,935,018.88 represents a legacy receivable due from marketers. Efforts have been made to engage the affected marketers for reconciliation and sign-off of the outstanding balances,” the NMDPRA said.

However, the Auditor-General rejected the explanation. “The management’s response to the issue has been noted; however, it is deemed unsatisfactory. Consequently, the findings remain valid until the recommendations are implemented,” the report stated.

The auditors recommended that the Authority Chief Executive should explain the non-recovery of the N431.01bn to the Public Accounts Committees of the National Assembly and recover and remit the money to the Treasury.

The report also warned that sanctions could apply for failure to collect and account for government revenue and gross misconduct if the recommendations were not implemented.

In another finding, the Auditor-General said 14 oil marketers owed N1.06bn in unpaid statutory levies on petroleum products. Under the Petroleum Industry Act, the NMDPRA is entitled to collect 0.5 per cent of the wholesale price of petroleum products sold in Nigeria from wholesale customers as part of its funding sources.

The audit found that N1.06bn remained outstanding as of January 24, 2025. “The sum of N1,059,622,848.29 was standing as the amount of indebtedness for the year 2024, by fourteen oil marketers,” the report stated.

The amount included penalties imposed on defaulting marketers, excluding Premium Motor Spirit. The NMDPRA, however, said it had recovered N3.19bn from total outstanding levies of N4.25bn covering January to December 2024.

The authority said, “Following reconciliation exercises, the Authority recovered N3.19bn of the N4.25bn outstanding 0.5 per cent Authority Levy for January-December 2024. The remaining balance of N1.06bn is being pursued through Demand Notices issued to the defaulting marketers.”

The auditors sustained the finding to the extent of the N1.06bn still outstanding and directed the authority to recover and remit the money to the Treasury. The report further found that the NMDPRA failed to remit N217.84m to the Industrial Training Fund in 2024.

According to the audit, the authority’s payroll for the year stood at N21.78bn, making it liable to remit one per cent of its total payroll to the ITF under the Industrial Training Fund Act. “The unremitted 1 per cent statutory Industrial Training Fund from the gross salary in the payroll of the Authority amounted to N217,841,922.18,” the report said.

The NMDPRA said it was in the process of settling the obligation. “The Authority is in the process of settling the outstanding 1 per cent Industrial Training Fund obligation. Evidence of payment will be submitted to the Office of the Auditor-General for the Federation upon completion of the remittance,” management said.

But the Auditor-General again described the response as unsatisfactory and maintained that the finding would remain until the money was remitted.

The findings come amid growing scrutiny of government agencies over revenue collection and remittance, particularly following repeated calls for stricter accountability in the management of public funds.

The NMDPRA was established under the Petroleum Industry Act 2021 to regulate Nigeria’s midstream and downstream petroleum sectors, including petroleum product distribution, transportation, storage and marketing.

The audit report now places renewed pressure on the authority to recover billions of naira tied up in legacy petroleum sector debts while strengthening its internal controls to prevent further revenue leakages.

However, some major oil marketers denied owing the agency when contacted for comments on the development, as they insisted that their obligations to the authority had been cleared.