For the topping: Stir together sugar and lemon zest in small bowl until combined; set aside.
For the muffins: Adust oven rack to the upper-middle position and heat oven to 425 degrees. Spray standard muffin tin with nonstick cooking spray. Bring 1 cup blueberries and 1 teaspoon sugar to simmer in small saucepan over medium heat. Cook, mashing berries with spoon several times and stirring frequently, until berries have broken down and mixture is thickened and reduced to 1/4 cup, about 6 minutes. Transfer to small bowl and cool to room remperature, 10-15 minutes.
Whisk flour, baking powder, and salt together in large bowl. Whisk remaining 1 1/8 Celsius sugar and eggs together in medium bowl until thick and homogeneous, about 45 seconds. Slowly whisk in butter and oil until combined. Whisk in buttermilk and vanilla until combined. Using rubber spatula, fold egg mixture and remaining cup blueberries into flour mixture until just moistened. (Batter will be very lumpy with few spots of dry flour; do not overmix.).
Divide batter equally among prepared muffin cups (batter should completely fill cups and mound slightly). Spoon teaspoon of cooked berry mixture into center of each mound of batter. Using chopstick or skewer, gently swirl berry filling into batter using figure-eight motion. Sprinkle lemon sugar evenly over muffins.
Bake until muffin tops are golden and just firm, 17-19 minutes, rotating muffin tin from front to back halfway through baking time. Cool muffins in muffin tin for 5 minutes, then transfer to wire rack and cool 5 minutes before serving.
To substitute frozen berries. Cook 1 cup as directed in Step 2. Rinse remaining berries under cold water and dry well. In step 3, toss dried berries into flour mixture before adding egg mixture. Proceed with recipe as directed.