MoRTH Extends Bitumen and Diesel Cost Relief to December 2026

National highway contractors will keep getting paid for the bitumen and diesel price shock until 31 December 2026. The Ministry of Road Transport and Highways has extended its cost escalation compensation by three months, so the relief now covers the opening of the post-monsoon paving season, the stretch when hot-mix plants, pavers and rollers on NH jobs work their longest shifts.

What MoRTH has extended

The Economic Times first reported the extension on 9 October; Financial Express, BW Businessworld and NBM&CW have since carried it. It keeps alive the mechanism MoRTH set up in April. Bitumen is settled every month as V = Bw x (Wf – W0): Bw is the bitumen actually consumed, capped at the approved job mix formula, W0 is the refinery rate on the project’s base date, and Wf is that month’s average rate at the nearest PSU refinery. A separate mechanism for bulk diesel and other POL items followed. In mid-September the National Highways Builders Federation had asked for exactly this: three more months, to 31 December.

Who actually gets the money, and who does not?

The compensation goes to the contractor or concessionaire, through the monthly bill. It is not paid per machine. A contractor running its own excavators, motor graders and rollers on an eligible NH package has its fuel and binder exposure cushioned until December.

Plenty of work sits outside it. State highways, PMGSY roads, municipal and private jobs are not covered by these circulars. Nor is any NH contract bid on or after 1 April 2026, because those bidders priced the new rates in. Contracts with no escalation clause at all follow a separate MoRTH circular dated 17 April, so check yours before assuming you’re in.

Our take: if you wet-hire machines to an NH contractor, with operator and fuel included in your rate, the diesel relief lands with your client, not with you. For the October to December window it is worth asking for a fuel-indexed clause, or moving to dry hire with client-supplied diesel. Our guide to bulk diesel pricing for contractors explains how the bulk and retail rates differ.

The bigger effect is on utilisation. A contractor that knows the bitumen bill is covered keeps the paving train moving rather than slowing work to wait out prices. That supports steady hours for pavers, tandem and pneumatic compactors and the tipper shuttle feeding the hot-mix plant, the core of any road construction fleet. Pavement-heavy resurfacing and PBMC contracts gain far more than structure-heavy packages, since bitumen is a much bigger share of their bills.

FAQ

Does the extension cover diesel used by machines on a national highway job?

It covers diesel and other POL cost escalation on eligible EPC, HAM and PBMC national highway contracts with a bid due date before 1 April 2026. The money is paid to the contractor through the monthly bill, so owners hiring machines out should check how fuel is treated in their hire agreement.

Is the bitumen compensation unlimited?

No. The quantity is limited to actual consumption within the approved job mix formula, and the payment is the difference between the base-date refinery rate and the month’s average rate at the nearest PSU refinery.

Are state highway or PMGSY contracts covered?

These MoRTH circulars apply to national highway projects, including NH works handled by state PWDs. Roads a state builds under its own programmes are outside them unless that state issues its own relief.

Related on DesiMachines: Diesel sales cap at Jio-bp, Nayara pumps: what the government said

Source: NBM&CW

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