The present invention relates to a process of reducing sulfur- or nitrogen-containing compounds and producing oxygenates, and in particular to a one-pot process of reducing sulfur- or nitrogen-containing compounds and also producing oxygenates in the presence of a homogeneous catalyst such as M.sup.n+/a first solvent or M.sub.1.sup.n+/a second solvent/M.sub.2.sup.m+/a third solvent or a mixture thereof, the process herein being useful as an excellent octane booster in the reformulated gasoline and as a cetane booster for the future oxygenated diesel in a one-pot reaction.