California Highway contractors enjoyed a busy summer with 802 Caltrans projects underway as of August 5th. The total value of these projects is over $12 billion according to the Department of Transportation Caltrans Construction Division.

The work is spread across the state from the Oregon state line to the Mexican border. Most of the work is concentrated in the major metropolitan areas that, of course, have most of the traffic. You can see a nearly complete list of the ongoing work at

//dot.ca.gov/-/media/dot-media/programs/construction/documents/contract-administration/statement-of-ongoing-contracts/all_july2022.pdf

Inflation Biggest Challenge

In addition to the usual challenges on construction projects, the specter of inflation is an ever-present issue in this market.

Diesel shortages and costs are high nationwide, but more so in California with the omnipresent requirements of the California Air Resources Board. Caltrans maintains a equipment rental fuel price book that sets the rate for contractors. They base the current fuel price on a one-year average of the California weekly diesel fuel price, which is published by the Department of Energy.

The diesel cost, from the book effective April 1, 2022, through March 31, 2023, is $4.164/gallon and includes both state and federal taxes. These taxes are removed for off-highway equipment. The agency makes changes to the rental book rate when the price exceeds 15-to-20 percent increase or decrease, if that will ever happen again. At press time, California No. 2 Diesel Retail Prices was at a current level of 6.019, down from $6.097 last week and up from $4.288 one year ago. This is a change of -1.28 percent from the last week and +40.37 percent from one year ago.

On top of that concern, the price of crude oil, the key component in asphalt paving has increased by 188 percent from 2018 to 2022.

By Dave Sorem, P.E. ECA Government Affairs Chairman email: [email protected]