NNPC Records 10,374% Increase In Road Tax Credit Income
The Nigerian National Petroleum Company Limited (NNPC Ltd) recorded a 10,374 per cent increase in income from its Road Infrastructure Tax Credit Scheme in 2025, despite withdrawing from direct funding of inherited Federal Government road projects.
An analysis of the company’s 2025 audited financial statements showed that NNPC recognised N92.901m as Road Infrastructure Tax Credit uplift income in 2025, compared with N887,000 recorded in 2024.
The increase occurred as the national oil company shifted towards operating as a commercially driven entity, ending its direct financing of Federal Government road projects under the tax-credit arrangement established by the previous administration.
The Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme was introduced under Executive Order 007 of 2019 to encourage private-sector participation in road construction and rehabilitation.
Under the scheme, participating companies financed approved road projects and recovered eligible expenditure through credits against their Companies Income Tax liabilities. The arrangement also provided an uplift component calculated based on the approved project cost.
According to Note 12.6 of NNPC’s 2025 financial statements, the uplift income represents the equivalent of the Central Bank of Nigeria’s Monetary Policy Rate plus 25 per cent of the approved project cost.
However, NNPC’s withdrawal from direct funding raised concerns over the completion of several inherited road projects, prompting the Federal Government to explore alternative financing arrangements.
The Minister of Works, David Umahi, said President Bola Tinubu had directed that the projects should continue under a different funding structure following NNPC’s decision to discontinue direct financing.
Umahi explained that NNPC informed the government on August 1, 2025, that it would no longer directly fund Federal Government projects because of its status as a commercially operated company.
According to the minister, the President subsequently approved alternative funding arrangements and directed that the inherited projects be incorporated into the government’s renewable infrastructure funding framework.
He added that contractors would be required to exhaust available funds before receiving additional payments, while the government had reviewed the scope and structure of the affected projects.
The Federal Government had intervened in August 2025 to reassure contractors that the projects would not be abandoned following NNPC’s withdrawal. The Ministry of Works subsequently developed a framework for prioritising and financing the inherited projects.
The broader road tax-credit scheme was formally discontinued in February 2026, when the Nigeria Revenue Service announced that companies would no longer be permitted to finance road projects through the arrangement.
The government maintained that tax collection should be separated from public expenditure decisions, with road construction and rehabilitation funded through established budgetary and financing mechanisms.
Meanwhile, NNPC’s financial statements showed a substantial increase in other income during the 2025 financial year.
At the group level, total other income rose to N8.416tn from N3.392tn in 2024, representing an increase of N5.025tn, or approximately 148.2 per cent.
The company’s standalone other income also increased by 114.5 per cent, rising to N8.061tn from N3.759tn in the preceding year.
The income categories included sundry income, management fees, dividend income, gains arising from changes in crude oil stock valuations and road infrastructure tax-credit uplift income.
NNPC explained in its financial statements that sundry income covered earnings from activities outside the group’s principal operations, including Trans-Forcados pipelines, crude processing fees, miscellaneous income from joint venture operators, writebacks of provisions and stock overlift claims.
Despite the sharp percentage increase in road tax-credit uplift income, the N92.901m recorded in 2025 remained a relatively small component of NNPC’s overall other income.
The increase therefore reflected growth from a low base rather than a significant contribution to the company’s overall earnings.
The reported uplift income also does not represent the total amount NNPC spent on road construction, the value of tax credits utilised or the outstanding cost of inherited projects.
With the tax-credit scheme discontinued, the Federal Government is expected to sustain the affected road projects through alternative funding channels while ensuring that contractors are paid for verified work.
