Refined oil remained at the heart of trade between the United Kingdom and Nigeria, accounting for more than two-thirds of total UK goods exports to Africa’s largest economy in the four quarters ending June 2025.

According to The PUNCH citing the latest UK–Nigeria Trade and Investment Factsheet released by the UK Department for Business and Trade, refined oil exports surged to £1.5 billion, representing 68.8 per cent of total UK goods shipped to Nigeria. This marks a sharp 62.8 per cent increase compared with the corresponding period ending June 2024.

Overall, UK exports to Nigeria rose by 12.3 per cent to £5.6 billion, while imports from Nigeria climbed 8.2 per cent to £2.3 billion, pushing total bilateral trade in goods and services between both nations to £8 billion — up 11.1 per cent (or £793 million) from a year earlier.

“Total trade in goods and services between the UK and Nigeria was £8.0bn in the four quarters to the end of Q2 2025, an increase of 11.1 per cent from the previous year,” the report stated.

Oil and Machinery Lead the Way

Refined oil remained the key driver of UK exports, followed by toilet and cleansing preparations (£55.8m), general industrial machinery (£42.7m), textile fabrics (£40.1m), and mechanical power generators (£35.1m) — all recording significant growth from the previous year.

The UK recorded a trade surplus of £3.3 billion with Nigeria, up from £2.8 billion a year earlier. Nigeria ranked as the UK’s 36th largest trading partner and 27th largest export market, accounting for 0.4 per cent of total UK trade.

Investment Flows Decline

Despite stronger trade volumes, investment ties weakened. The stock of UK foreign direct investment in Nigeria fell by 24.7 per cent to £385 million, while Nigeria’s investment in the UK declined by 41.2 per cent to £489 million at the end of 2023.

Most UK exports to Nigeria originated from London and the South East of England, reflecting the region’s dominance in trade activities.

Nigeria’s Changing Energy Landscape

The UK’s overall market share in Nigeria rose to 11 per cent in 2024, up from 9.7 per cent, driven by stronger goods exports. Yet, this trend may soon shift.

Nigeria’s import of refined oil is projected to fall sharply following President Bola Tinubu’s approval of a 15 per cent import levy on petrol and diesel — a move designed to protect the country’s expanding local refining capacity.

The levy, applied on Cost, Insurance, and Freight (CIF) values, is expected to raise the landed cost of imported refined products by about ₦99.72 per litre, making foreign fuel imports far less competitive.

A Refining Revolution in Motion

Nigeria’s export profile to the UK continues to evolve. Crude oil remained the top export, valued at £1.3 billion (73.1 per cent), followed by refined oil at £223.8 million (13.1 per cent) and gas at £167.8 million (9.8 per cent). Exports of beverages and tobacco (£14.6m) and plastics (£12.8m) also grew steadily.

Gas exports saw the fastest growth — up 75 per cent year-on-year — while refined oil exports increased 62.6 per cent, and crude oil shipments rose 7.9 per cent.

At the centre of this shift is the Dangote Petroleum Refinery, Africa’s largest, designed to process up to 650,000 barrels of crude per day with plans to double capacity. The refinery is already enabling Nigeria to move from crude exports to refined product exports — a historic transformation for Africa’s energy sector.

Experts Weigh In

While energy analysts commend the government’s effort to strengthen domestic refining, opinions remain divided over the timing of the new tariff.

Some experts warn that the 15 per cent import levy could raise fuel prices and deepen economic hardship, while others argue it will boost government revenue, encourage local production, and stabilize supply in the medium term.

As Nigeria balances between short-term inflationary pressures and long-term industrial gains, one thing is clear:
The country’s refining renaissance is reshaping its trade dynamics — and potentially redefining its energy independence.

Source: The PUNCH / UK Department for Business and Trade