Problems with gasoline production due to UAV attacks on refineries led to an increase in toluene prices

The threat of gasoline shortages amid attacks on refineries is forcing the government and companies to consider different ways to increase production. In particular, as Kommersant found out, enterprises are reducing the production of aromatic hydrocarbons, redirecting straight-run raw materials to gasoline plants, which has already led to an increase in toluene prices. Quite radical options are also being discussed, such as a partial return to the production of Euro-3 gasoline and lifting the ban on an effective but harmful octane-increasing additive, monomethylaniline, which has been banned since 2016. But experts consider the latter scenario difficult to implement, and the situation itself is not so critical.

The government instructed the Ministry of Energy, the Ministry of Industry and Trade and the Federal Antimonopoly Service (FAS) to conduct an analysis of pricing for components for high-octane gasoline in order to identify factors of unreasonable growth. This follows from the minutes of a meeting with Deputy Prime Minister Alexander Novak in early April. In particular, we are talking about toluene. Kommersant’s sources note that the initiator of the inspection was Tatneft. The FAS confirmed to Kommersant that the service has begun an analysis of toluene pricing and has sent inquiries to oil companies. Other departments and companies did not comment on the situation.

Toluene belongs to the group of aromatic hydrocarbons and is obtained by catalytic reforming of oil. It is used as a solvent, raw material for organic synthesis and a high-octane additive to motor fuels. According to Alexander Kotov, head of Neft Research consulting, in 2023, toluene production in Russia amounted to 320 thousand tons, consumption – 310 thousand tons. Of this volume, 200 thousand tons were used for blending into gasoline as a component (the average share of toluene in gasoline is 0.5%), he says. The largest producers of this fraction are the Omsk Refinery (60 thousand tons), Ufaneftekhim (90 thousand tons), Slavneft-YANOS (40 thousand tons), as well as LUKOIL-Permnefteorgsintez (30 thousand tons) and Gazprom neftekhim Salavat (25 thousand tons).

As Kommersant’s market sources explain, toluene in its pure form as an octane-increasing component is practically not used. It, along with other aromatic compounds, enters the fuel as part of the reformate. The main additive for increasing the octane number is methyl tert-butyl ether, the content of which in gasoline usually does not exceed 10%, as well as alkylates.

However, toluene and gasoline are produced from the same components of primary processing, the capacity of which was damaged in March as a result of Ukrainian drone attacks on refineries.

“Aromatic fractions and motor gasoline have the same raw materials – certain components of straight-run gasoline. When there is a shortage of fuel, plants redirect this raw material to the production of gasoline, unloading aromatic units. And it makes sense to use toluene as a high-octane additive only during moments of sharp jumps in prices for motor gasoline and only for a short time, because as soon as aromatics begin to flow into gasoline, prices for it rise adequately, and the flow stops,” explains one of Kommersant’s sources. Kommersant’s interlocutors add that the maximum rate for introducing aromatics into Euro-5 gasoline is 35%.

An increase in prices for gasoline components is a common occurrence against the backdrop of a seasonal increase in demand for fuel, but this year fears of a gasoline shortage due to unscheduled repairs at a number of refineries further heated the market. Kommersant’s interlocutors note that this applies not only to toluene, but also to all aromatics, the production of which may suffer as oil companies concentrate their efforts on the production of gasoline. At the same time, Kommersant’s sources emphasize that at the moment there is no real shortage of toluene.

Since the government sets strict targets for companies to maintain gasoline production despite accidents, this gives rise to various exotic proposals. Thus, according to Kommersant, a scenario was discussed for introducing changes to the current technical regulations and a partial return to the Euro-3 gasoline standard (allows an aromatic content of up to 42%), as well as lifting the ban on the use of another octane-increasing additive – monomethylaniline (MMA) . It was banned in 2016 due to its negative impact on the environment. According to Kommersant sources, such temporary easing will help increase gasoline production to 10%, which would more than cover the effect of accidents at refineries. But Kommersant’s interlocutors doubt that the proposal for MMA will be accepted, since gasoline below the Euro-5 class is dangerous for modern car engines, and the use of MMA requires a new infrastructure for its storage and loading. In addition, this opens up additional opportunities for producers of “gray” fuel, which the Ministry of Finance has spent a lot of effort fighting over the past ten years.

Olga Mordyushenko, Dmitry Kozlov