India is facing a challenge in meeting its road construction target due to the ongoing West Asia crisis, which has severely disrupted crude supplies from the region. However, the availability of bitumen has improved with higher domestic production and increased imports of Venezuelan crude.

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The Bitumen Shortage: A Story of Supply and Demand

Before the conflict, the price of VG-40 bitumen, the grade most widely used for road and highway projects in India, spiked from Rs 52,000-55,000 per tonne to over Rs 1 lakh per tonne in May. The closure of the Strait of Hormuz, which connects West Asia to Europe and India, was the main cause of this disruption.

However, since then, there has been a moderation in prices, with the current price range being Rs 85,000-86,000 per tonne as of August 16. While this is still higher than pre-conflict levels, it is a welcome relief for road-owning agencies and road builders.

The reason for the high price is that Russian oil is predominantly 'sweet crude', making it unsuitable for producing high-quality bitumen. In contrast, Venezuelan crude is more suitable for bitumen production due to its higher sulfur content.

Indian authorities are working hard to address this challenge. The government has been encouraging domestic production and increasing imports of Venezuelan crude to improve availability of bitumen. This move is expected to help meet India's road construction target, which is crucial for the country's economic growth.