Nitration reactions are generally conducted using mixed acid. These are extremely exothermic, and tend to run away. Our study show that the reaction is more complex than it is generally believed. We have provided some preliminary evidence to show that nitrobenzene, above a critical concentration of sulfuric acid exists forms microemulsion at ambient temperatures. This hypothesis is consent with anomalous solubility of nitro-aromatics in concentrated sulfuric acid. There is also formation of Winsor III-phases. In this work we have studied kinetics of nitration of nitrobenzene (NB) (below solubility limits) in concentrated sulfuric acid ( > 82% w/w) and found that although the reaction follows second order kinetics, the rate constant show a discontinuous decrease after a critical loading of the organic phase. Reaction is also inhibited by addition of dinitrobenzene (DNB). We have provided the explanation for this finding based on the hypothesis that the reaction between nitrobenzene and nitronium ions occurs on the surface nitrobenzene micelles which are stabilized by concentrated sulfuric acid. This phenomenon is likely being responsible for causing runaway condition in the nitrator.