New Delhi, Aug. 27 -- The ministry of road transport and highways (MoRTH) may extend a special relief mechanism for highway contractors beyond September as conflict-related disruptions in West Asia push up bitumen prices and pressure project economics, two people aware of the matter said.

The relief, introduced in the wake of the conflict and initially available until June, was extended to September. The ministry may now extend it further, potentially until December or the end of the financial year, after reviewing market conditions and bitumen prices next month, one of the people said.

Under the relief mechanism, contractors can claim compensation for higher bitumen costs based on actual consumption and prevailing prices. The base rate...