Bitumen price surge: Bitumen costs escalate, slowing road projects; Industry calls for state reserve system to stabilize supply

Ranchi: Disruptions linked to the West Asia conflict are driving up the cost of key materials, particularly bitumen, steel, cement and polymers due to supply constraints, affecting construction activities across the state and raising concerns over delays in projects.

Bitumen, a petroleum by-product essential for road construction, has seen a sharp price rise and supply shortages. Industry representatives said bitumen price has jumped from Rs 40,000 per tonne to Rs 54,000 in the past three months, with availability severely constrained.

The surge in cost has been compounded by a sharp increase in logistics expenses, with commercial diesel prices rising by around Rs 22 per litre. This has pushed up transportation costs for raw materials, further burdening contractors.

Industry representatives said that due to acute shortages, road construction activity has slowed down by almost 50%. They also called for a long-term buffer mechanism, suggesting that the state develops a reserve system for bitumen on the lines of the 90-day crude oil storage at the national level.

“Rise in diesel price has significantly increased logistics costs, affecting the entire supply chain. With bitumen shortage, road construction has slowed down. The govt should consider creating a state-level reserve system for bitumen, similar to the 90-day crude oil storage model, to ensure supply stability,” Aditya Malhotra, president of Federation of Jharkhand Chamber of Commerce and Industries, said on Thursday.

“Sharp increase in bitumen price is making it difficult for contractors who have already taken work orders,” he added.

State’s dependence on external supply hubs has worsened the situation. With limited availability at the Bokaro depot and disruptions in supplies from Haldia, contractors are struggling to procure materials on time.

“Over the past three months, bitumen price has increased by around Rs 15,000 per tonne. At the same time, supply from both Bokaro and Haldia has been inconsistent, affecting ongoing road projects across the state,” said Ravi Raj Agarwal, chairman, Builders Association of India, Jharkhand chapter.

Industry bodies have demanded the establishment of bulk bitumen depots within Jharkhand and govt intervention to stabilise prices and ensure an uninterrupted supply.

“Contractors are facing severe financial pressure as input costs have risen across the board. Smaller contractors working on thin margins are the worst affected, and many projects are slowing down,” said Rohit Agarwal, general secretary, FJCCI.