The Federal Government, through the Federal Accounts Allocation Committee, deducted a total of N256.52bn from revenue allocations to fund gas infrastructure projects in the first half of 2025, according to official figures.
This development comes as the government considers a review of deductions and revenue retention practices.
The deductions, made for the Midstream and Downstream Gas Infrastructure Fund (MDGIF), fluctuated significantly month-to-month, indicating surges in project execution as well as possible procedural delays.
The MDGIF was established to finance infrastructure projects aimed at improving transportation and processing (midstream) and utilisation (downstream) of natural gas in Nigeria.
Spread across the six geopolitical zones, these projects are part of efforts to bridge critical infrastructure gaps in the gas value chain. In 2023, President Bola Tinubu appointed a governing council to oversee the fund.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority manages the MDGIF, while the governing council is chaired by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo.
The fund’s objectives include attracting more than $575bn in investments to expand Nigeria’s gas sector and build a robust midstream and downstream market.
Although initially designed to raise funds from a levy on petroleum and gas sales, the MDGIF now relies heavily on government allocations.
A review of FAAC reports from January to June 2025 showed that N256.52bn was deducted from oil revenue allocations within the six-month period, with June recording the steepest month-on-month increase of 60.38 per cent. In January, N35.07bn was deducted, followed by a decline to N31.83bn in February.
Allocations rose sharply in March to N52.99bn before falling to N29.19bn in April.
Deductions then climbed again in May to N41.27bn, and further surged to N66.18bn in June, the highest figure for the period.
The June spike coincided with the Federal Government’s signing of over N165bn in equity investment agreements with 10 companies to establish gas processing plants, compressed natural gas (CNG) refuelling stations, and liquefied petroleum gas (LPG) storage facilities nationwide.
These projects, announced on June 2, include six gas processing plants two designed to harness flare gas three CNG stations, and a bulk LPG storage facility.
They form a key part of Nigeria’s “Decade of Gas” initiative, aimed at boosting domestic supply, reducing gas flaring, and promoting clean energy adoption.
At the council’s inauguration, Ekpo described the establishment of the MDGIF as timely for Nigeria’s energy sector. He said the initiative is intended to drive economic diversification and sustainable development.
He noted, “Our goals are ambitious, but so is our determination. With the collective expertise and commitment of the governing council, as well as the support of our stakeholders, we aim to drive innovation, create employment opportunities, and ensure energy security for our nation.”
He added, “It reflects the belief that, together, we can harness the vast potential of our nation’s gas resources to drive innovation, create jobs, and contribute significantly to the overall development of our beloved country.”
“The MDGIF is not merely a fund; it is a vehicle for progress, a conduit for prosperity, and a catalyst for sustainable development. This alignment should, in turn, lead to a tangible reduction in the prices of LPG and CNG, benefitting particularly the low-income earners in our society,” Ekpo stated.
