The Knox County town of Hope is waiting for asphalt prices to drop before signing road repaving contracts, an early sign that local governments are being hit by price spikes from the war with Iran.
Oil prices skyrocketed after the U.S. and Israel launched strikes on Iran nearly a month ago. Inflation on oil-based products like asphalt is starting to draw attention from local officials in Maine.
As the spring re-paving season approaches, state and local governments will need to weigh when or whether to pave their roads.
The problem is quickly hitting home in Hope, where officials recently opened paving bids. The final price will depend on how much asphalt costs this July when road work is set to begin, so they are hoping both the war and prices will settle this summer.
“We’re not going to write our contract with the hopes that the [final] price… will be reduced based on the fighting in the Middle East,” Town Administrator Samantha Mank said. If prices were more stable, the town “would absolutely write it up immediately, so that we were ready.”
If the price is higher than Hope would like come this summer, the town may be able to delay the project. Unless residents reject the town’s next budget proposal in the spring, Mank said they would not be able to cancel the contract awards.
It’s another factor that may drive spending hikes and stress property taxpayers even as Mainers remain frustrated by high taxes after years of inflation on local services. The cost of a ton of liquid asphalt in Maine has increased 6% since U.S. strikes on Iran began, and it is up 5.4% over this time last year.
At just over $660 per ton, the price is at a nearly two-year high, with weeks to go before peak paving season likely drives up prices further. Other states are seeing similar increases.
The MaineDOT did not immediately answer questions about whether the price spike will impact any of its projects.
After spiking to more than $100 per barrel after the conflict began, crude oil prices have cooled somewhat but remain elevated. The price of bitumen, the petroleum-based product in asphalt, has risen more than 32% in the past month.
An employee of B&B Paving, a Hermon-based contractor that submitted a bid for the Hope project, confirmed prices are rising due to the war, and they are expected to keep rising.
“Everyone is just paying more,” said the employee, who declined to give their name. “No one’s making any more around here, on any of that, we’re all just paying more.”
