According to WPB, Indian refiners have raised domestic bitumen prices for the second time in September, with VG30 increasing by around $28/MT and VG40 by approximately $30/MT from September 16. The latest adjustment is significantly larger than the increase introduced at the beginning of the month and comes while road-paving demand is only beginning to recover as rainfall eases across parts of the country.
The September 16 revision follows an earlier refinery increase on September 1. At the Vizag depot, VG30 bulk had risen by INR 1,160/MT at the beginning of September to INR 70,860/MT, while VG40 increased by INR 1,320/MT to INR 75,980/MT.
The latest adjustment is therefore notably stronger than the first increase of the month. Market indications suggest refinery prices are currently moving upward faster than actual bitumen consumption, creating a widening gap between replacement costs and the pace at which contractors are returning to the market.
Seasonality would normally support stronger demand at this point in the year, but the transition is not yet complete. Rainfall is easing in several regions and road works are beginning to restart, while the withdrawal of the southwest monsoon is only gradually progressing across the country.
This distinction matters because the September price increase is not being driven solely by a sudden surge in paving consumption. Supply costs, imported cargo economics and continued uncertainty in regional energy and shipping markets are also pushing domestic replacement values higher.
India entered the current period after already experiencing significant bitumen price and availability pressure earlier in the financial year. Recent analysis of the country’s highway sector found that sharp increases in bitumen prices and disruptions to availability had negatively affected road execution during the first quarter of FY2027.
The underlying road-construction pipeline nevertheless remains substantial. Highway execution is expected to remain around 9,000–9,500 km during FY2027, while project awards could increase to approximately 8,000–8,500 km, creating a sizeable base of potential bitumen consumption once weather conditions allow construction activity to accelerate.
There are already signs of road maintenance activity returning in some areas. In Chandigarh, authorities have prepared to restart road recarpeting as rainfall eases, but inconsistent bitumen availability remains a concern and contractors have been asked to prioritize the most urgent sections.
That combination creates an unusual market structure. Demand is beginning to recover seasonally, but it has not yet reached its strongest construction-period levels, while refinery prices have already moved sharply higher.
Imported material is not providing an easy ceiling on domestic prices either. Higher cargo costs, shipping risks and insurance expenses associated with Middle Eastern supply have made imported bitumen more difficult for some Indian buyers to absorb economically.
This is important because imported cargoes normally provide Indian buyers with an alternative when refinery prices become expensive. When the landed cost of foreign material also rises, domestic producers have greater room to increase refinery prices without immediately losing demand to imports.
The effect may differ significantly between contractors. Buyers with fixed project schedules or urgent road works may have little choice but to absorb higher prices, while more price-sensitive buyers can delay purchases or reduce inventories until construction activity strengthens.
For asphalt producers and road contractors, the September 16 revision therefore raises the risk of margin pressure before the main seasonal recovery is fully established. Contractors with limited price-escalation protection may face a greater mismatch between tendered project costs and current bitumen replacement values.
Broader infrastructure companies are already facing similar pressure. Rising costs for bitumen, cement and steel, together with elevated freight and insurance expenses, are expected to weigh on margins even though India’s overall infrastructure investment and project pipeline remain strong.
The next phase of the market will depend on whether physical demand catches up with the refinery price increases. If road activity accelerates strongly as rainfall retreats, the current price levels may find greater support from consumption rather than primarily from replacement and supply costs.
A slower recovery would create a different situation. Refiners could face resistance from contractors if price increases continue while consumption remains subdued, particularly in regions where buyers have the flexibility to postpone procurement.
Imports will also be an important indicator. If high domestic refinery prices make alternative cargoes commercially attractive despite freight and insurance costs, India could again draw more heavily on overseas supply, including Middle Eastern origins.
For now, the September 16 increase sends a clear signal that the Indian bitumen market is moving into the next construction cycle with a substantially higher cost base. The significant point is not simply that VG30 and VG40 have increased again, but that refinery pricing has moved ahead of the recovery in physical demand.
The balance could change quickly once road construction accelerates. Until then, the market will be watching domestic refinery revisions, imported cargo economics, rainfall withdrawal and actual contractor purchasing volumes to determine whether the latest increase can be sustained.
By WPB
India Bitumen, VG30, VG40, Bitumen Prices, Indian Refiners, Road Construction, Asphalt, Refinery Prices, Bitumen Demand, Bitumen Imports, Infrastructure, Monsoon, Freight, Insurance, Road Projects, Indian Bitumen Market
