Regulator Orders Oil Firms to Pay 3% into Host Community Fund

Nigeria’s midstream and downstream petroleum regulator has ordered operators and licensees in the sector to comply with the mandatory three per cent annual contribution to host community funds, launching a digital portal to improve transparency and oversight.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority made the directive known at a Stakeholder Sensitisation Workshop on the implementation of the Host Community Development Trust framework, held in Port Harcourt. The HCDT framework, established under the Petroleum Industry Act 2021, is designed to ensure that oil-producing communities receive direct social, environmental, and economic benefits from petroleum operations in their areas.

Speaking on behalf of the Authority Chief Executive, Rabiu Umar, the Executive Director for Health, Safety, Environment and Community, Dr Mustapha Lamorde, said the newly introduced digital portal would enable trust registration, project tracking, compliance reporting, monitoring of statutory contributions, and real-time regulatory oversight.

“With strong national expectations for the HCDT framework to transition from policy to practical implementation, the workshop was organised to provide clarity on the establishment of Host Community Development Trusts,” he said. Lamorde added that the workshop would also cover the governance responsibilities of trustees, obligations of operators and licensees, administration of the trust fund, and grievance resolution mechanisms.

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The Director of Environmental Sustainability and Host Community at NMDPRA, Mrs Anne Omezi, said the engagement would promote transparency and ensure that host communities derive greater benefits from the oil and gas sector. “We are here to build bridges of understanding, foster collaboration, and establish a shared vision for community development,” she said.

Also speaking, the Chairman of the House of Representatives Committee on Host Communities, Dumnamene Dekor, stressed that communities hosting midstream infrastructure such as pipelines, depots, terminals, and processing facilities must derive practical and lasting benefits from such operations.

A community representative from Rivers State, Chief Barry Mwara, said the workshop had equipped him with valuable information and called on the NMDPRA to strengthen its supervisory role to ensure the fund is properly managed and used for its intended purpose.