Russia mulls banning exports of aromatics: report

Russia could ban the export of aromatics, Kommersant daily reported Aug. 18, suggesting reduced output of the chemicals due to unplanned repairs at refineries and their wide use in gasoline production as reasons for the potential embargo.

A government committee is currently considering the potential ban of benzene, phenol, toluene and xylenes, the newspaper cited sources as saying.

Aromatic chemical components are used as octane-boosting components in the production of gasoline, and in the production of downstream plastics and chemicals.

Aromatics' prices have surged due to the increasing supply shortages.

According to Kommersant, last year Russia produced 1.3 million mt of benzene, down 10.3% year over year, 361,000 mt of toluene, 6.8% lower, and 370,000 mt of xylenes, a decline of 17.3%.

Previously, when Russia applied the Euro-5 standard for motor fuel, the share of aromatics in gasoline was limited to 35%, but since the recent relaxation of environmental standards, this has risen to 42%.

Kommersant, however, also cited sources saying that the current high domestic prices had in effect almost halted export flows, which have never been very high. Hence, an export ban was not expected to have a significant impact.

Meanwhile, an increasing number of refineries have begun offering lower-specification gasoline on the St. Petersburg exchange, according to market sources. Refineries started selling Euro-3 last week, and are now also selling Euro-2 and 4 on the exchange.

The Russian government has authorized the production, import and release into circulation of three lower environmental class grades of gasoline and diesel for one year.

Russian Prime Minister Mikhail Mishustin signed a decree Aug. 5 authorizing the production and release into circulation of Euro-2, Euro-3 and Euro-4 gasoline and diesel until July 1, 2027. The aim of the measure is to "prevent destabilization of the domestic motor fuel market," according to the document.