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Govt Assures Highway Builders on Raw Material Supply Amid Global Disruptions

The government has assured highway construction companies that supplies of key raw materials like bitumen, cement, and diesel will remain adequate despite logistics disruptions linked to the US-Iran war. Contractors had raised concerns about delivery bottlenecks and sought force majeure provisions, fearing project delays and cost overruns. Officials noted that while bitumen prices have risen, diesel prices have not increased, and the government is confident in managing fuel supplies. India is also diversifying its crude oil imports to reduce dependence on vulnerable shipping routes.

Key Points: Govt Assures Highway Builders on Raw Material Supply

  • Contractors sought force majeure over delays
  • Bitumen prices rose by ~₹2,000/tonne
  • Diesel costs could push cement, steel prices higher
  • Govt says fuel prices will not increase
  • India diversifying crude oil import routes
2 min read

Supply of raw materials will remain adequate: Govt assures highway builders

Government assures highway contractors of adequate bitumen, cement, and diesel supply despite US-Iran war logistics disruptions. Read more.

"India has increased its crude oil imports from sources other than the Strait of Hormuz. - Government Sources"

New Delhi, March 9

The government has assured highway construction companies that supplies of key raw materials such as bitumen, cement and diesel will remain adequate despite logistics disruptions linked to the US-Iran war, sources said.

Citing sources, a report from NDTV Profit said that officials from the National Highways Authority of India met with members of the National Highways Builders Federation after contractors raised concerns about delays in truck movements and ship offloading that have created bottlenecks in delivery of materials, sources said.

Consequently, several construction firms approached authorities and sought force majeure provisions in their contracts arguing that disruptions could impact project timelines and raise costs.

Sources mentioned provisions in infrastructure contracts that allow certain forms of relief in the event of extraordinary disruptions, which contractors are reportedly exploring.

As bitumen prices reportedly rose around Rs 2,000 per tonne, contractors are worried about margins.

Industry representatives also warned that higher diesel costs could pass through to cement and steel prices because fuel influences manufacturing and transportation expenses. So far, there has been no increase in diesel price.

Earlier, government sources said on Saturday that petrol and diesel prices will not increase, adding that India's energy stock position is improving and the situation is becoming more stable.

The improving energy stock situation has given the government greater confidence in managing fuel supplies. India has also taken steps to diversify its crude oil imports to reduce dependence on vulnerable routes.

"India has increased its crude oil imports from sources other than the Strait of Hormuz. Earlier, about 60 per cent of India's crude oil imports came from sources outside the strategic shipping route, but that share has now increased to around 70 per cent," according to sources.

Government currently expects state-run oil marketing companies (OMCs) to absorb the impact for now and pump prices of fuels will remain the same, according to reports. OMCs may have to accept lower profits amid the spike in international oil prices, according to sources.

- IANS

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Reader Comments

P
Priya S
The bitumen price hike of Rs 2000/tonne is worrying. Contractors will eventually pass this cost to the government, and ultimately, it's taxpayer money. We need more transparency on how these price fluctuations are managed in contracts.
A
Aman W
Diversifying crude oil imports is a smart, long-term strategic move. Reducing dependence on the Strait of Hormuz from 40% to 30% is a good start. Geopolitics will keep disrupting things, we need to be self-reliant. #AatmanirbharBharat
S
Sarah B
While the assurance is welcome, I hope the force majeure clause is applied fairly. In the past, small contractors have suffered greatly during such disruptions while bigger players managed. A clear, standardized relief mechanism is needed.
V
Vikram M
Asking OMCs to absorb the impact and keep pump prices stable is a double-edged sword. It protects the common man from inflation today, but if OMCs make losses, it hurts their ability to invest in infrastructure tomorrow. Tough balance.
K
Kavya N
The real test will be in the remote project sites. Assurances in Delhi are one thing, but will the trucks with cement and diesel reach a highway site in Assam or Ladakh on time? That's where logistics get really challenged.

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