New Delhi: After oil and fertilizers, a new commodity is feeling the heat of conflict in West Asia: bitumen. As India’s plan to build nearly 10,000 km of highways in FY27 is in jeopardy, the National Highways Authority of India (NHAI) is urgently sourcing bitumen from state-run oil refiners such as Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd. two people (HPCL) reported on the development.
“Bitumen prices are revised every 15 days and in discussions with highway builders, NHAI said it will coordinate with oil marketing companies IOCL, HPCL and BPCL to ensure supplies are not affected,” said one of the people cited above on condition of anonymity.
The annual requirement of bitumen in India is nearly 9 million tonnes. Industry estimates suggest that bitumen prices range from ₹40,000-60,000 per tonne in India, depending on quality. Global prices are in the range of US$400-500 per tonne, roughly equivalent to Indian prices using the current rupee to dollar exchange rate.
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The Ministry of Road Transport and Highways, through NHAI, has started talks with the industry on bitumen supplies as it is a crucial input and India is dependent on imports from West Asia, the second person said, also requesting anonymity.
Queries sent on March 6 to NHAI, Ministry of Road Transport and Highways, IOCL, BPCL, HPCL remained unanswered.
Diversify to beat scarcity
Experts said India’s dependence on bitumen imports is significant and that the long-running conflict in West Asia could prompt 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). Of the 8.3 million tonnes of bitumen used in India last year, 5.3 million tonnes was produced domestically and the rest was imported,” said Prashant Vashisht, senior vice president and co-chairman of Rating Group I.
Vashisht said Indian refineries could increase bitumen production, but if the conflict continues, alternative sources of imports such as Singapore or other Southeast Asian countries may be needed.
Other experts said import dependence could be higher if oil imports are included, and that import diversification could cover the supply gap but may not reduce prices, which have already started to rise.
West Asian crude supplies used to make bitumen in India, combined with direct supplies of bitumen from state-owned and private refiners in the region, account for about 55-60% of imports, said Jagannarayan Padmanabhan, senior director and global head of consulting at Crisil Intelligence.
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Imports of oil, and therefore bitumen, from Russia, West Africa and the Americas are expected to rise, which may offset a lack of volume from the Middle East, he said. But that may not lower the price, he added.
“Indian OMCs usually revise their prices fortnightly for all petroleum products, but due to today’s war situation, bitumen prices have increased by almost ₹1,000 per MT (metric tonne) with effect from 5Mar26 – just 4 days after their last revision on 1Mar26 – resulting in ex-refinery price overruns ₹51,000 per MT. The highway industry expects such revisions to continue until the Strait of Hormuz is clear and the war ends,” Crisil’s Padmanabhan said.
Ensuring the supply of asphalt
Road construction company IRB Infrastructure Developers Ltd declined to comment. A spokesman for the National Highway Builders Federation (NHBF), an industry body, said NHAI had ensured continuity of supply of bitumen during the consultations.
This comes as the February 28 US-Israeli attack on Iran and its aftermath crippled key supply chains in the region, with cargo carriers unable to cross Strait of Hormuz from the Persian Gulf.
India, which has the world’s second-largest road network of nearly 150,000 km, is expected to build 9,000-9,500 km of new roads in FY27. Mint he also announced that road projects are worth it ₹1 trillion would be allocated to suppliers in FY27.
Road construction by the Ministry of Road Transport and Highways 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 that Indian highway builders can store about 100-200 tonnes of bitumen at any given time and that they place orders every two weeks, which oil companies deliver in 2-3 days.
Asphalt, or asphalt, is a by-product produced in oil refineries. After lighter fuels such as gasoline and diesel are removed by distillation, the heavy residue at the bottom of the refinery column is processed into bitumen.
According to World Bank data, more than 99% of India’s bitumen imports come from Iraq, the United Arab Emirates (UAE), Iran, Oman and Bahrain. In 2023, India imported $1.3 billion worth of bitumen, about 3.2 million tons, according to the data. Of that, imports from Iraq and the United Arab Emirates were worth $1.2 billion, according to the latest World Bank figures.
Cascade effect
While the government has assured that strategic reserves for oil and petrochemicals will last for another 50 days, the closure of the Strait of Hormuz may result in higher prices for Gulf oil, given the now longer shipping routes through the Bab-el-Mandeb-Suez-Cape of Good Hope to avoid Hormuz, Crisil’s Padmanabhan said.
India is the third largest importer of crude oil, the raw material from which bitumen is made, after the US and China.
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The supply blockade and the recent rise in oil prices have significant implications for India, a net importer that meets nearly 90% of its oil needs through imports.
In addition, not only oil supplies but also liquefied natural gas would be affected. In FY25, about 50% of India’s crude oil imports and 54% of its LNG imports were routed through the Strait of Hormuz.
However, government officials said imports from alternative sources have increased and oil stocks are in a “comfortable” position. Mint earlier announced that India was considering importing oil from alternative sources, including South America, Africa and Russia.
Further, purchases of Russian crude oil stuck on vessels also picked up after the US Treasury said it had “allowed” a 30-day waiver for Indian refiners to procure Russian crude oil loaded on vessels from March 5 in a bid to provide temporary relief.
Key things
- NHAI is coordinating with state refiners to maintain bitumen supply amid regional war.
- Conflict in West Asia threatens India’s target of 10,000 km of new highways a year.
- Bitumen prices rose by ₹1,000 per tonne in just four days.
- India relies on West Asia for more than 99% of its bitumen imports.
- Boat trips around Africa increase costs as the Strait of Hormuz remains closed.
