The Lukoil plant cut gasoline production in half due to Western sanctions

One of Russia’s largest Nizhny Novgorod oil refineries in Kstovo cut gasoline production in half due to the consequences of sanctions imposed against Russia. “Kommersant” reports that foreign compressor equipment broke down at a key facility for production, and there is nothing to replace it now.

At the beginning of January, one of the two catalytic cracking units necessary for the processing of petroleum fractions into high-octane gasoline and diesel fuel broke down at the plant. It was put into operation in 2010 and is capable of producing 1.4 million Euro-5 gasoline per hour, the owner of the refinery company “Lukoil” reported. The cost of construction was estimated at 30 billion rubles (about $1 billion at the then exchange rate).

The accident at the Nizhny Novgorod Refinery was the first known case when a shortage of equipment due to sanctions could lead to a long-term stoppage of production, Kommersant claims. The plant is important for supplying the Moscow region, which accounts for about 30 percent of gasoline consumption in the country.

As the newspaper writes, since January 10, “Lukoil” stopped sales of AI-95 gasoline on the stock exchange, probably in order to provide fuel to its own gas station network. The publication notes that now this does not have a significant effect on prices, since winter is a time of low demand for fuel.