Federal Government Allocates N256.52bn for Gas Infrastructure in First Half of 2025
The Nigerian federal government has allocated a total of N256.52 billion from revenue allocations to support gas infrastructure projects during the first half of 2025, according to official data. This allocation is part of the Midstream and Downstream Gas Infrastructure Fund (MDGIF), which aims to enhance the country’s natural gas sector.
This development comes amid ongoing efforts by the government to review its deductions and revenue retention practices. The MDGIF, established to invest in infrastructure that improves the transportation, processing, and utilization of natural gas, has seen fluctuating monthly deductions. These fluctuations suggest both periods of increased project execution and potential procedural delays.
The fund supports projects spread across Nigeria’s six geopolitical zones, aiming to address critical gaps in the gas value chain. In 2023, President Bola Tinubu appointed a governing council to oversee the MDGIF, with the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, serving as its chairperson.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority manages the MDGIF, while the governing council is responsible for overseeing its activities. The fund’s objectives include attracting over $575 billion in investments to develop the gas sector, expanding midstream and downstream infrastructure, and creating a more robust gas market in Nigeria.
Initially designed to generate funds through a small levy on the wholesale price of petroleum products and natural gas, the MDGIF now relies heavily on government allocations. A breakdown of the figures from the Federal Accounts Allocation Committee (FAAC) report between January and June 2025 shows a total deduction of N256.52 billion for gas infrastructure projects.
The monthly deductions showed significant variations:
- January: N35.07 billion
- February: N31.83 billion (a 9.24% drop)
- March: N52.99 billion (a 66.49% increase)
- April: N29.19 billion (a 44.91% decrease)
- May: N41.27 billion (a 41.38% increase)
- June: N66.18 billion (a 60.38% increase)
June recorded the highest monthly figure, marking a sharp rise compared to previous months. This spike followed the signing of over N165 billion in equity investment agreements with 10 companies to develop gas processing plants, compressed natural gas (CNG) refueling stations, and liquefied petroleum gas (LPG) storage facilities nationwide.
These projects are central to Nigeria’s “Decade of Gas” agenda, which seeks to boost domestic gas supply, reduce flaring, and promote clean energy adoption. The announced projects include six gas processing plants, two of which will utilize flare gas, three CNG stations, and a bulk LPG storage facility.
At the inauguration meeting of the governing council, Ekpo highlighted the significance of the MDGIF in Nigeria’s energy landscape. He emphasized that the fund represents not just a financial tool but a symbol of the government’s commitment to fostering private sector participation and international collaboration.
“Our goals are ambitious, but so is our determination,” Ekpo said. “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 that the MDGIF is more than just a fund; it is a vehicle for progress, a conduit for prosperity, and a catalyst for sustainable development. Ekpo also noted that the initiative should lead to a reduction in the prices of LPG and CNG, benefiting low-income earners in particular.
The MDGIF’s success depends on effective implementation, stakeholder cooperation, and sustained government support. As Nigeria continues to focus on its gas sector, the fund remains a critical component in achieving long-term energy security and economic growth.
