New Delhi, March 9 The government has assured highway construction companies that supplies of key raw materials such as bitumen, cement and diesel will remain adequate despite logistics disruptions linked to the US-Iran war, sources said.
Citing sources, a report from NDTV Profit said that officials from the National Highways Authority of India met with members of the National Highways Builders Federation after contractors raised concerns about delays in truck movements and ship offloading that have created bottlenecks in delivery of materials, sources said.
Consequently, several construction firms approached authorities and sought force majeure provisions in their contracts arguing that disruptions could impact project timelines and raise costs.
Sources mentioned provisions in infrastructure contracts that allow certain forms of relief in the event of extraordinary disruptions, which contractors are reportedly exploring.
As bitumen prices reportedly rose around Rs 2,000 per tonne, contractors are worried about margins.
Industry representatives also warned that higher diesel costs could pass through to cement and steel prices because fuel influences manufacturing and transportation expenses. So far, there has been no increase in diesel price.
Earlier, government sources said on Saturday that petrol and diesel prices will not increase, adding that India’s energy stock position is improving and the situation is becoming more stable.
The improving energy stock situation has given the government greater confidence in managing fuel supplies. India has also taken steps to diversify its crude oil imports to reduce dependence on vulnerable routes.
“India has increased its crude oil imports from sources other than the Strait of Hormuz. Earlier, about 60 per cent of India’s crude oil imports came from sources outside the strategic shipping route, but that share has now increased to around 70 per cent,” according to sources.
Government currently expects state-run oil marketing companies (OMCs) to absorb the impact for now and pump prices of fuels will remain the same, according to reports. OMCs may have to accept lower profits amid the spike in international oil prices, according to sources.
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