Fuel and Bitumen Shortages Stall Road Projects Across Nepal

Road infrastructure projects across Nepal have started facing delays due to a severe shortage of fuel and bitumen, triggered by the escalating Iran-US conflict in West Asia. The disruption came just as the second half of the current fiscal year — typically a period of accelerated development work from mid-January to mid-July — was set to begin.

Contractors have reported being unable to secure adequate supplies of both fuel and bitumen as prices have risen sharply in recent weeks. The impact has been particularly severe on road projects that have reached the blacktopping stage, with some works grinding to a complete halt.

Among the worst-hit is the Nagdhunga-Muglin road expansion project, a major entry route to Kathmandu. According to Keshav Prasad Ojha, chief of the project's eastern section, blacktopping on the 95-kilometre stretch has come to a full stop due to the lack of bitumen.

Similar problems have been reported by district road project offices and contractors nationwide, many of whom have prepared the base layer for blacktopping but have suspended tender processes for bitumen purchases as prices have skyrocketed.

Spokesperson for the Department of Roads, Shyam Bahadur Khadka, confirmed that the department has received reports from various project sites about difficulties in proceeding with work due to shortages of both bitumen and diesel.

"The Nagdhunga-Muglin road and several blacktopping projects in various districts are facing the same problem," Khadka said. He added that contractors have been complaining that work is being affected due to the unavailability of diesel in required quantities.

Nicolas Pandey, president of the Federation of Contractors' Associations of Nepal, said the impact of fuel shortages and price hikes is visible in both small and large projects. He noted that existing provisions allow for price adjustments if the cost of any construction material fluctuates by more than 10 percent unexpectedly. "The government must issue such a directive soon," Pandey said.

Ramesh Sharma, chairman of Sharma & Company, one of Nepal's largest construction firms, said the problem is not limited to a few projects but has spread across the entire construction sector. He said price hikes, coupled with fuel shortages, have made work even more difficult.

"Transportation fares have increased, driving up the price of even gravel and sand," Sharma said. "Due to the steep rise in bitumen and petroleum prices, we have not been able to move forward with work."

An official at Nepal Bitumen and Barrel Industry Limited under the Panchakanya Group said that while bitumen is available, its price has increased dramatically. Previously available at Rs 100 per kilogram, bitumen now costs more than Rs 150 per kilogram. "It's not that bitumen is unavailable," the official said. "However, there is some shortage, and the price has become expensive."

Contractors had previously bid at rates between Rs 98 and Rs 110 per kilogram. With the price now exceeding Rs 150, demand has dropped, and many contractors have put their work on hold. Only those projects where the road base is already prepared are buying bitumen at the higher rate to continue work.

According to Sharma, the overall construction sector has slowed due to the rise in construction material prices. He suggested that if the government cannot control fuel and bitumen prices, it should facilitate relief measures for a period through customs exemptions or other concessions.