Bitumen, Diesel Price Surge Slows Andhra Pradesh Road Construction

Rising global tensions between the United States, Israel, and Iran have driven up bitumen and diesel prices, delaying road construction projects in Andhra Pradesh. Contractors are hesitant to start new work, slowing projects during the peak summer season.

“Bitumen prices have jumped from ₹47,000 per ton in February to ₹71,000–₹72,000 now,” said a senior R&B official. “This adds nearly ₹25,000 per ton to construction costs. Around 30–35% of road budgets go to bitumen alone.”

Public sector firms like Indian Oil Corporation and HPCL refine crude oil from West Asia into bitumen. Supply disruptions have forced them to raise prices. Industrial diesel has also surged from ₹83 to ₹113 per litre.

“The higher prices affect both costs and work speed. Contractors are now taking a wait-and-watch approach,” said a contractor on a national highway project. “Earlier, we had a 45-day credit facility for bitumen. Now, companies require cash upfront, which increases financial pressure.”

The impact is visible in state targets. Andhra Pradesh aimed to build 789 km of national highways in 2025–26. By March-end, only 749 km were completed. Repair and restoration work under R&B is also slow.

Smaller projects under the Ministry of Road Transport and Highways require contractors to stick to pre-agreed prices, even if material costs rise. “NHAI projects allow payment adjustments, but contractors need large upfront investments. They are cautious,” the official added.

The combination of higher costs and supply uncertainty is slowing road construction across the state.