The Indian government will compensate highway builders for the additional expenditure incurred due to a sharp rise in bulk diesel and bitumen prices, a move aimed at shielding infrastructure projects from the impact of the ongoing West Asia conflict. Bulk diesel prices have surged by nearly 71% over the past three months, while bitumen prices have also seen significant increases.
Impact on Highway Construction
The price hike has strained the finances of highway firms and slowed construction activities since the conflict erupted in February. In response, the road transport ministry had earlier introduced a scheme for additional payments to cover bitumen price increases, updating the rates monthly. Bitumen prices rose from Rs 49,000 per tonne on February 28 to Rs 80,000 per tonne by June 1. An official stated, “The new policy will be out soon. Highway agencies will pay the differential amount between the base rate and prevailing price of bulk diesel.”
Parliamentary Panel Review
A parliamentary panel led by Sanjay Jha of the Janata Dal (United) held a meeting on Monday to assess the conflict's impact on road construction. Jha noted that National Highway projects are particularly vulnerable, as 85% of the bitumen used is imported from a specific region now affected by route blockages. He added that despite disruptions, the government has taken steps to prevent the situation from worsening.
Data from the ministry revealed that National Highway construction fell to just 148 km in April—75% less than in April 2025—but recovered to 592 km in May, still 21% lower than May last year. The panel recommended creating a reserve of bitumen and identifying alternative routes and sources for the material. Members also urged the ministry to develop a roadmap to prepare for future shocks.
Jha emphasized that the crisis has accelerated efforts toward domestic self-reliance in infrastructure development.
