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Himachal Road Projects under stress as Crude Oil spike hikes Bitumen prices to Rs 86/kg
Shimla, April 6,
The ongoing geopolitical tensions involving the United States, Israel and Iran are beginning to cast a direct shadow on infrastructure development in Himachal Pradesh, with road construction works emerging as one of the worst-hit sectors.
As the crucial metalling season approaches in the hill state, contractors are grappling with a steep rise in input costs, primarily driven by a surge in global crude oil prices. The escalation has significantly increased the prices of bitumen and Light Diesel Oil (LDO), both essential for road construction.
Projects under the PMGSY Phase III are already facing disruptions, with contractors stating that the situation has become financially unsustainable.
According to Satish Vij, president of the Himachal Contractors Association, bitumen prices have nearly doubled—from Rs 43 per kg at the time of preparing Detailed Project Reports (DPRs) to Rs 86.60 per kg currently. LDO prices have also surged by over 50 percent, further escalating operational costs, as it fuels machinery used in tarring and metalling.
“This sharp rise has made it economically unviable to continue work under existing contract conditions,” Vij said, adding that the unexpected cost escalation linked to Gulf tensions has stalled project execution.
Contractors have already flagged the issue with the Public Works Department, which in turn has taken up the matter with the Centre. However, with no immediate relief in sight, many contractors have halted work and warned that operations will not resume until compensation mechanisms are introduced.
Also read:CPI(M) Shimla Protest Iran Attack: Safety of 43,000 Himachalis in Gulf at stake
The ripple effects could extend beyond ongoing works. Contractors caution that delays in addressing the issue may also impact PMGSY Phase IV, even as new tenders are being floated.
India relies heavily on imports of bitumen from countries such as Iraq, Iran, the UAE, Saudi Arabia and Kuwait, making domestic projects vulnerable to global disruptions.
With rising inflation, fragile terrain, and frequent weather-related disruptions already weighing on contractors, the current crisis threatens to slow rural connectivity projects and deepen financial stress across the sector.
About the Author
The HimachalScape Bureau comprises seasoned journalists from Himachal Pradesh with over 25 years of experience in leading media conglomerates such as The Times of India and United News of India. Known for their in-depth regional insights, the team brings credible, research-driven, and balanced reportage on Himachal’s socio-political and developmental landscape.
