UK Refined Oil Exports to Nigeria Hit £1.5bn Amid Strong Energy Trade Ties

The United Kingdom’s refined oil exports to Nigeria have surged to £1.5 billion, underscoring the deepening trade relationship between both nations despite ongoing efforts by Nigeria to strengthen local refining capacity and reduce dependence on imported fuel.

According to recent trade data from the UK Office for National Statistics (ONS), Nigeria ranked among the top destinations for British refined petroleum products in the first three quarters of 2025. The export figures represent a significant increase compared to previous years, reflecting both the high demand for refined fuels in Nigeria and the shifting dynamics in the global energy market.

The ONS report showed that refined oil products now account for a large portion of UK exports to West Africa, with Nigeria taking the lead due to its heavy reliance on imported petrol, diesel, and aviation fuel. The £1.5bn figure marks one of the strongest export performances in recent years, highlighting how supply constraints in Nigeria’s domestic refining sector have continued to sustain demand for foreign fuel imports.

Energy analysts say the development points to the ongoing structural imbalance in Nigeria’s oil industry, where the country—Africa’s largest crude producer—still depends on foreign refiners for much of its petroleum needs. Despite owning four state refineries and witnessing the commissioning of the Dangote Petroleum Refinery, local production has yet to meet national consumption levels.

A London-based energy market analyst, Tom Edwards, noted that while the surge in exports reflects the UK’s growing share in Nigeria’s energy import market, it also raises questions about the long-term sustainability of such dependence. “Nigeria’s continued reliance on imported refined fuel, including from the UK, is a reminder of the challenges facing its domestic refining reforms. However, from a trade standpoint, it has strengthened UK-Nigeria commercial ties in the short term,” he said.

The British government has described the energy trade between both countries as mutually beneficial. The UK Department for Business and Trade stated that the rise in refined fuel exports is part of an expanding bilateral economic partnership that also includes investments in energy transition, renewables, and infrastructure.

A statement from the department noted that, “The United Kingdom continues to play a vital role in ensuring stable fuel supply to strategic partners like Nigeria while supporting collaboration on clean energy initiatives. The growth in refined petroleum exports demonstrates the resilience and depth of UK-Nigeria trade relations.”

Nigeria, however, has been actively pursuing measures to reverse its dependence on imported petroleum products. The Nigerian National Petroleum Company Limited (NNPCL) has said that once the Port Harcourt, Warri, and Kaduna refineries are fully rehabilitated and the Dangote Refinery ramps up production, local supply will meet demand and potentially enable exports.

NNPCL Group Chief Executive Officer, Mele Kyari, had earlier stated that the combined capacity of both public and private refineries would soon eliminate fuel importation. “By 2027, Nigeria will not only meet its domestic refined product demand but will also become a net exporter of petroleum products,” he said.

However, market observers maintain that until domestic refineries operate at full capacity, Nigeria will continue to rely on international suppliers such as the UK, the Netherlands, and Belgium for refined fuel.

Recent customs and import data from Nigeria support this position. Petroleum products account for over 30% of Nigeria’s total imports, making them one of the country’s most significant foreign exchange drains. With global crude oil prices fluctuating and exchange rate volatility affecting import costs, fuel prices have remained a major driver of inflation in Nigeria.

Economists warn that the country’s exposure to global refined fuel prices will continue to strain its foreign reserves and exert pressure on the naira, especially in periods of reduced oil earnings. “Nigeria’s fuel import dependence poses macroeconomic risks, as global supply shocks or rising refining margins abroad directly affect domestic energy prices,” said Dr. Ifeoma Ude, an economist at the University of Lagos.

Meanwhile, trade analysts have described the £1.5bn oil export value as a significant contributor to the UK’s post-Brexit trade diversification strategy. With Europe’s energy market becoming more competitive, the UK has expanded its refined fuel exports to developing economies, including those in Africa.

Data from the UK’s Department for Energy Security and Net Zero show that refined oil exports to Africa rose by over 30% in 2025, with Nigeria, Ghana, and South Africa emerging as top buyers. This increase, analysts say, has been driven by Nigeria’s domestic refining shortfall and steady demand growth due to population expansion and industrial activity.

The ongoing reforms in Nigeria’s downstream petroleum sector are expected to gradually alter the trade balance. The government’s implementation of the Petroleum Industry Act (PIA), alongside partnerships with private sector operators, aims to create a more efficient and competitive market.

However, fuel marketers in Nigeria have noted that the transition toward domestic sufficiency will take time. According to the Major Energy Marketers Association of Nigeria (MEMAN), infrastructural bottlenecks, foreign exchange scarcity, and regulatory uncertainties have delayed full optimisation of local refining capacity.

In a recent statement, MEMAN’s chairman, Clement Isong, said, “Until refineries are operating efficiently and consistently, Nigeria will continue to depend on imported fuel. We expect some stability only when local supply chains are fully functional.”

Experts also believe that the recent 15% import tariff on refined petroleum products, introduced by the Nigerian government to encourage local refining, may gradually reduce the volume of imports from the UK and other foreign suppliers in the medium term.

Nonetheless, the £1.5bn trade figure underscores the enduring economic link between the UK and Nigeria’s energy markets. Both nations have also been exploring cooperation in green energy, carbon transition, and oil and gas technology exchange as part of broader trade diversification efforts.

Observers say that as Nigeria works to reform its petroleum industry and expand refining capacity, the UK will continue to play a pivotal role in bridging short-term supply gaps and providing technical expertise to support the transition to energy self-sufficiency.