Amid West Asia conflict, shortage of bitumen set to impact construction, maintenance of roads

NEW DELHI: Govt is staring at a major shortage of bitumen due to the ongoing West Asia conflict, which is set to impact construction and maintenance of tar roads. While the price of VG-40, the most commonly used grade of bitumen, has almost doubled since the conflict began, its availability has plummeted compared to the estimated requirement of around six lakh tonnes till July 15, only for highway projects.

Industry insiders said that while crude oil availability in the country remains comfortable due to import of Russian oil, it has not improved bitumen supply. Sweet crude from Russia can’t produce the bitumen grade that’s suitable for Indian weather conditions.

Russian oil contains very low levels of sulphur, which naturally produce lower bitumen grades like VG-10 or VG-30 without specialised processing.

“VG-40 is produced from crude that we get from West Asian countries and even most of the finished products were imported from these nationals through the Strait of Hormuz. The conflict has hit this supply and the ripple effect is felt on the maintenance and construction of highways,” said a person aware of the developments.

The issue was also flagged at the last meeting of informal Group of Ministers (iGoM) headed by defence minister Rajnath Singh, highlighting how non-availability of the required quality of bitumen has reduced the pace of highway construction to one-fourth in April, persons in the know said. Officials said the impact is similar in the case of rural, municipal and state roads.

Industry players said that while the road transport ministry has notified that highway builders in all types of projects will be adequately compensated for higher price of bitumen, the key challenge is to get the required supply before the monsoon for timely maintenance. The price of one tonne of VG-40 at different oil marketing companies (OMCs) increased from Rs 53,000-58,000 on March 1 to over Rs 1 lakh on May 1.

“The prices are increasing further. But the larger challenge is how do we get bitumen to complete our work even at a higher cost. There have been several and continuous deliberation with officials and OMCs as well. Going by the trend of current availability, the supply will be far less than the requirement,” said a senior executive of a highway construction.

Officials said that though the current availability of bitumen with OMCs is much less, efforts are on to see how to get more supply, including through imports even at a higher price.