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Nigeria Buys £1.1B Oil from UK Despite Local Refining Plans

Nigeria imported £1.1 billion worth of refined oil from the United Kingdom in the 12 months ended December 2025, showing that the country still depends heavily on imported petroleum products despite efforts to expand local refining.

The figures came from the latest UK Trade and Investment Factsheet. According to the report, refined oil remained the largest UK goods export to Nigeria, accounting for 60.5% of all goods exported from the UK to Nigeria during the period. The value also rose by 9.4% compared with the previous year.

Why the Figure Matters

The £1.1 billion import figure shows how deeply Nigeria’s fuel supply chain still depends on foreign refining. Crude oil may be produced locally, but the country has often lacked enough functional domestic refining capacity to meet demand.

This means Nigeria exports crude and imports refined products at higher value. That model weakens the economy because it puts pressure on foreign exchange, increases exposure to global fuel prices, and creates supply risks.

When Nigeria buys refined products from countries like the UK, it is effectively paying for processing, logistics, shipping, insurance, and margins that could have stayed inside the domestic economy if local refining capacity were stronger.

Refined Oil Dominates UK Exports to Nigeria

Refined oil was not just one of the UK’s exports to Nigeria. It dominated the trade basket. At 60.5% of UK goods exports to Nigeria, refined oil generated more value than the next major export categories combined.

Other UK exports to Nigeria included toilet and cleansing preparations, textile fabrics, general industrial machinery, beverages, and tobacco. But none came close to refined oil.

This shows that Nigeria’s energy demand remains a major driver of bilateral trade with the UK. It also confirms that petroleum products still sit at the centre of Nigeria’s import structure.

The Bigger Trade Picture

Total trade in goods and services between Nigeria and the UK reached £7.6 billion in the four quarters to December 2025. This represented a 10.8% increase from the corresponding period of 2024.

UK exports to Nigeria rose to £5.5 billion, while imports from Nigeria reached £2.1 billion. This means the UK sold far more to Nigeria than it bought from Nigeria during the period.

For Nigeria, this trade imbalance raises an important question. How can the country reduce imports of products it has the raw materials to produce? Refined oil is the clearest example.

Dangote Refinery and Local Refining Expectations

Nigeria’s dependence on imported refined oil comes at a time when the Dangote Petroleum Refinery is expected to change the country’s downstream energy market. The refinery has the capacity to process 650,000 barrels per day, making it a major project in Africa’s energy sector.

The rehabilitation of state-owned refineries has also been part of Nigeria’s strategy to reduce fuel imports. If these refining projects operate consistently, Nigeria could cut its import bill, save foreign exchange, and improve domestic supply.

However, capacity alone is not enough. Local refineries must operate efficiently, access crude consistently, maintain product quality, and distribute fuel at competitive prices.

Impact on Foreign Exchange

Fuel importation has long placed pressure on Nigeria’s foreign exchange market. Importers need dollars or pounds to pay suppliers abroad. When demand for foreign currency rises, pressure on the naira increases.

Reducing refined petroleum imports could therefore support exchange rate stability. It could also help conserve external reserves and improve Nigeria’s balance of payments.

This is why local refining is not only an energy issue. It is also a currency, inflation, trade, and industrial policy issue.

What It Means for Nigerians

For ordinary Nigerians, fuel imports affect daily life. Imported petroleum products influence transport costs, food prices, electricity generation, logistics, and business expenses.

If local refining becomes more reliable, it could reduce supply disruptions and improve market stability. But this does not automatically mean fuel prices will fall sharply. Prices still depend on crude costs, exchange rates, taxes, logistics, regulation, and market competition.

Still, a stronger local refining system gives Nigeria more control over supply than depending heavily on foreign refiners.

Expert View

Nigeria’s £1.1 billion refined oil import bill from the UK shows that the country’s energy transition is still incomplete. The country has made progress with private refining investment, but import dependence remains high.

The real test is whether domestic refineries can deliver consistent output at scale. If they can, Nigeria may reduce fuel imports, save foreign exchange, support the naira, and build a stronger downstream industry.

Until then, the country will continue to face the costly irony of producing crude oil while importing large volumes of refined products.