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In an attempt to prevent import of bitumen by private Indian and foreign companies, public sector oil companies are refraining from increasing its domestic price despite a sharp increase in global prices.

Though bitumen is a decontrolled petroleum product whose domestic price should be based on import parity, the public sector oil companies have not raised its price for the past two months. It s prices in the international market have gone up by a $10-12 a tonne.

The marketing committee of these oil companies, which meets in Mumbai almost every 15 days to decide on the prices of decontrolled products, has, of late, increased domestic prices of all products including fuel oil, naphtha and low sulphur heavy stock (LSHS) in proportion with rising international oil prices since April. However, it has not touched bitumen prices.

Sources point out that the oil PSUs want to keep the prices of their bitumen much lower than international prices because even if the domestic prices are only marginally lower than the international prices, the quality-concious private sector road builders would prefer imported bitumen because of its better quality. In sucha cae, they fear, they would lose their bitumen market.

In fact, the oil PSUs were alarmed recently when the private sector imported around 3,000 tonnes of bitumen on the eastern coast and 4,000 tonnes on the western coast for use by road-builders.

The country faces a shortage of 3,00,000 tonnes of bitumen every year. In fact, the shortage is much more considering that India requires harder grades of bitumen for its roads than the one produced by Indian refineries. The softer grades contain excess wax, which rise to the road surface during summer breaking its surface.

Another problem facing the importers is ambiguity in the government's policy on bitumen import. Bitumen is a petroleum product which was under the list of canalised items till August 1997. On August 14, 1997, the government decanalised the import of petroleum bitumen and put it under open general licence. However, in the 1998 export-import policy, it appeared as a canalised item.