Bitumen prices in international markets have risen by around 24% this month, for which the costs of building and repairing future roads are expected to rise as Bangladesh is heavily dependent on imports.

Each tonne sold for $ 310 in the first week before climbing to $ 385 by the end of the month. It cost $ 370 in January.

Overall project spending can increase by up to 10 percent, according to users, mainly government agencies such as the Department of Roads and Highways (RHD), the Local Government Engineering Department (LGED) and municipal corporations. .

Bitumen is obtained as a residue from the distillation of crude oil. Gravel, sand and other fillers are mixed with bitumen as a binder for use in paving roads.

Currently, about 90 percent of Bangladesh’s annual demand for 5 lakh tonnes of bitumen is met by imports.

In fiscal year 2019-2020, around 3.8 lakh tonnes of bitumen were imported by Bangladesh.

In 2019, around Tk 1,721 crore was spent on importing bitumen, according to AKM Manir Hossain Pathan, RHD additional chief engineer (planning and maintenance).

Bangladesh Petroleum Corporation can only supply 70,000 tonnes of bitumen as a by-product of Eastern Refinery Ltd, he said.

RHD is the main consumer of this locally produced bitumen.

According to private importers, the pandemic has had an impact on economic conditions, causing the prices of goods and raw materials, including bitumen, to rise and fall.

Initially, when the pandemic broke in 2020, bitumen prices had fallen by 30%.

The whole year was marked by ups and downs and unpredictable fluctuations. December recorded the lowest point before rising again.

“Previously, contractors bought imported bitumen at Tk 46,000 per tonne,” said SM Khorshed Alam, president of the Bangladesh Construction Industry Association.

“Now it is Tk 60,000 per tonne, which would increase the costs of building or repairing roads by about 10 percent,” he said.

This will cause entrepreneurs to stop working on ongoing projects, squandering public funds and depriving citizens of benefits, he said.

He believes the current rise in prices is the result of increased international demand, which could even lead to the importation and use of low-quality bitumen.

Depending on its weather conditions, Bangladesh uses bitumen of a “grade 60/70”.

Mir Nasir Hossain, bitumen importer and former chairman of the Bangladesh Federation of Chambers of Commerce and Industry, said contractors had no opportunity to adjust the prices of projects that have already been awarded to them.

According to him, the price of bitumen fluctuates at the same rate as that of crude oil on the international market.

Now the price of crude oil is on an upward trend, the impact of which has diminished on the global bitumen market, he said.

Crude oil is currently selling for $ 83.57 a barrel down from $ 50 in January.

Pathan of RHD said there was no possibility to change the prices mentioned in the current projects.

However, he said that the impact of changes in the international market would certainly trickle down to the local market as the country was still heavily dependent on imports.

RHD and LGED are the main buyers of bitumen, he said, and annual usage has increased by around 10-15%.

Different government agencies are responsible for building and repairing different roads and highways across the country. The scenario can be best understood by imagining the shift from cities to rural areas.

In cities, municipal corporations are responsible. Outside, the RHD is aimed at motorways. The LGED takes care of the subsequent rural roads.

The RHD supervises some 22,000 kilometers of motorways. In addition, the government is extending all national highways from four to six lanes.

The LGED has 354,000 kilometers, of which 105,000 kilometers are paved.

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