HARLINGEN — The supply chain crisis is driving up asphalt prices, forcing city officials to consider scaling back their annual street paving projects.
The coronavirus pandemic’s economic slowdown led to production cuts in oil-based products such as asphalt and other construction materials, driving up demand while spurring rising costs.
In San Benito, where city commissioners are planning a $1.5 million street paving project, officials received two bids on Friday for 11 months of street repairing materials, showing asphalt prices per ton in the $90-range, Mayor Rick Guerra said Monday.
“The price went up,” he said. “The price is going to be very crucial.”
Guerra, who noted he could not disclose the bids’ amounts until they’re opened Wednesday, said asphalt prices have jumped from about $80 to $85 per ton.
Trying to lock-in prices
The cost of oil, from which asphalt is made, is driving up material costs.
Meanwhile, asphalt costs partly depend on diesel prices, which stand at about $5.34 a gallon.
Now, officials are trying to lock-in a contract price, Guerra said.
“I’m hoping we can lock-in a price,” he said, noting the fluctuation in gasoline prices.
“We’re gambling to get the right price to be able to move some of these projects,” he said. “Some companies were asking for a three-to six-month locking price — they don’t know how the economy is as far as gasoline. But the diesel is what’s killing us — the trucks and semis are delivering all the asphalt.”
Asphalt prices jump from $60 to $82.50 a ton
Since mid 2021, the price of asphalt has jumped from $60 a ton to $82.50 a ton in Brownsville, said Monica Sosa, an accounts payable clerk with Frontera Materials, which has held the city’s contract.
As part of the city’s new $15.8 million general fund budget, City Manager Manuel De La Rosa is pulling $500,000 from the city’s $11 million unassigned funds account to finance the $1.5 million paving project, one of the city’s biggest street programs.
Last year, officials funded a $1 million street project.
Projecting 25-percent jump
In Harlingen, officials are projecting asphalt costs to jump by about 25 percent, Assistant City Manager Craig Cook said.
At City Hall, they’re getting ready to request bids expected to be opened toward the end of November for the city’s annual $2.4 million street paving project, he said.
“We’re confident in our estimate,” Cook said, adding the projection’s based on a 25-percent jump in asphalt prices.
“We’ll know if we can afford all the streets we want to do or if we have to restructure,” he said. “If a bid came in at $3 million, we’ll have to cut a street or two out.”
Mulling Commerce Street
On the city’s 2021-2022 street list, officials have been planning to pave nearly eight miles of streets, or about 41,000 feet, Cook said.
But if asphalt bids come in too high, they’re considering pulling Commerce Street, from Tyler Avenue to Fair Park Boulevard, off the list, he said, adding the city has landed a federal grant aimed at designing the roadway.
In August, the U.S. Transportation Department awarded the city a $5 million grant aimed at upgrading Commerce Street, funding redesigning and preliminary engineering costs.
The grant aims at funding upgrades such as drainage and sidewalks along the 3.4-mile roadway, officials said.
However, the grant won’t fund street construction costs, Cook said.
