NHAI Pulling Out All Stops To Ensure Bitumen Supply From State-Run Refiners Amid West Asia Shortage

(MENAFN- Live Mint) New Delhi: After oil and fertilizer, a new commodity is feeling the heat of the West Asia conflict: bitumen. With India’s plan to build nearly 10,000 km of highways in FY27 under threat, the National Highway Authority of India (NHAI) is urgently securing bitumen supplies from state-run oil refiners like Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL), and Hindustan Petroleum Corp. Ltd (HPCL), two people aware of the development said.

“Bitumen prices are revised every 15 days, and in discussions with highway builders, NHAI has said it will coordinate with oil marketing companies IOCL, HPCL, and BPCL to ensure that supplies are not impacted,” said one of the people cited above, speaking on the condition of anonymity.

India’s annual bitumen requirement is nearly 9 million tonnes. Industry estimates suggest bitumen prices range from ₹40,000-60,000 per tonne in India, depending on quality. Global prices are in the $400-500 per tonne range, roughly equivalent to Indian prices using the current rupee-dollar exchange rate.

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The ministry of road transport and highways, through NHAI, started discussions with the industry over bitumen supplies because it is a crucial input and India is dependent on West Asian imports, said the second person, also requesting anonymity.

Queries emailed to NHAI, the ministry of road transport and highways, IOCL, BPCL, HPCL on 6 March remained unanswered.

** Diversify to beat shortage**

Experts said India’s dependence on bitumen imports is significant, and that a prolonged conflict in West Asia could push India to diversify its sources.

“India imported about 35-36% of its bitumen requirement in FY25, with a significant amount coming from the Middle East (West Asia). Out of the 8.3 million tonnes of bitumen used in India last year, 5.3 million tonnes were made domestically, and the rest was imported,” said Prashant Vashisht, senior vice-president and co-group head, ratings agency Icra.

Vashisht said Indian refineries could increase bitumen production, but if the conflict continues, alternative import sources such as Singapore or other Southeast Asian countries might be needed.

Other experts said the import dependence could be higher if oil imports are factored in, and that diversifying imports could cover the supply gap but may not reduce prices, which have already begun to increase.

Oil supplies from West Asia, used to make bitumen in India, combined with direct bitumen supplies from state-owned and private refineries in the region, account for about 55-60% of imports, said Jagannarayan Padmanabhan, senior director and global head-consulting, Crisil Intelligence.

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Imports of crude, and therefore bitumen, from Russia, West Africa and the Americas are expected to increase, which may offset the volume shortage from the Middle East, he said. But this may not bring the price down, he added.

“Indian OMCs usually revise their prices for all petroleum products every fortnight, but owing to the war situation today, they have hiked bitumen prices by nearly ₹1,000 per MT (metric tonne) effective 5-March-26-a mere 4 days after their last revision on 1-March-26-which has resulted in the ex-refinery price crossing ₹51,000 per MT. The highway industry expects such revisions to continue till the Strait of Hormuz is clear and the war ends,” said Padmanabhan of Crisil.

** Ensuring bitumen supply**

Road building company IRB Infrastructure Developers Ltd declined to comment. A spokesperson for the National Highway Builders Federation (NHBF), an industry body, said NHAI has assured continuity of bitumen supplies during consultations.

This comes at a time when the US-Israeli attack on Iran on 28 February and its fallout have crippled crucial supply chains in the region, with freight carriers unable to cross the Strait of Hormuz from the Persian Gulf.

India, which has the world’s second-largest road network, nearly 150,000 km, is expected to build 9,000-9,500 km of new roads in FY27. Mint has also reported that road projects worth ₹1 trillion would be awarded to contractors in FY27.

Road building by the road transport and highways ministry is projected at 9,500-10,000 km in FY26 and 9,000-9,500 km in FY27, down from 10,660 km in FY25, Icra said in a February 2026 note.

Sector experts also said Indian highway builders can store about 100–200 tonnes of bitumen at any given time, and that they place orders bi-weekly, which oil marketing companies deliver in 2-3 days.

Bitumen, or asphalt, is a byproduct made in oil refineries. After distillation removes lighter fuels such as petrol and diesel, the heavy residue at the bottom of the refinery column is processed into bitumen.

More than 99% of India’s bitumen imports come from Iraq, the United Arab Emirates (UAE), Iran, Oman, and Bahrain, according to World Bank data. In 2023, India imported $1.3 billion worth of bitumen, approximately 3.2 million tonnes, according to the data. Of this, imports from Iraq and UAE were worth $1.2 billion, according to latest World Bank data.

** Cascading effect**

While the government has assured that strategic reserves for crude and petro products are enough for another 50 days, the closure of the Strait of Hormuz may result in Gulf crude becoming expensive, given the now longer shipping routes via the Bab-el-Mandeb Strait - Suez Canal - Cape of Good Hope to avoid Hormuz, said Crisil’s Padmanabhan.

India is the third-largest importer of crude oil, after the US and China, the raw material from which bitumen is produced.

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The supply crunch and recent surge in oil prices carry significant implications for India, a net importer that meets nearly 90% of its oil requirement through imports.

Furthermore, not only oil but also liquefied natural gas supplies would be impacted. In FY25, about 50% of India’s crude oil imports and 54% of LNG imports were routed through the Strait of Hormuz.

Government officials, however, said that imports from alternative sources have increased and crude stocks are in a ‘comfortable’ position. Mint earlier reported that India is considering importing oil from alternative sources, including South America, Africa, and Russia.

Further, procurement of Russian oil stranded on vessels has also picked up after the US treasury department said it has ‘allowed’ a 30-day waiver for Indian refiners to procure Russian oil loaded on vessels as of 5 March in a bid to provide temporary relief.

Key Takeaways

NHAI coordinates with state refiners to maintain bitumen supply amid regional war.

West Asia conflict threatens India’s goal of 10,000 km of new highways annually.

Bitumen prices spiked by ₹1,000 per tonne in just four days.

India relies on West Asia for over 99% of bitumen imports.

Shipping detours around Africa increase costs as the Strait of Hormuz remains closed.

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