CIL absorbs surge in input costs to shield coal users from price hike

Coal India Ltd (CIL) is absorbing a sharp rise in input costs, including explosives and diesel, to shield domestic consumers from higher coal prices amid global energy volatility following the West Asia crisis, the company said in a statement on Friday.

 

The state-run miner has chosen not to pass on the increased costs despite a steep surge in key inputs. Prices of ammonium nitrate (AN), which constitutes around 60 per cent of explosives used in mining, have risen 44 per cent from Rs 50,500 per tonne to Rs 72,750 per tonne as of April 1, 2026. This has pushed the average cost of explosives up by about 26 per cent within a month, from Rs 39,588 per tonne in February to Rs 49,783 per tonne by March-end. CIL’s subsidiaries collectively consume around 9 lakh tonnes of explosives annually.

 

 

At the same time, industrial diesel prices have jumped by around 54 per cent, from Rs 92 per litre in mid-March to Rs 142 per litre as of April 1. Diesel is a critical input for mining operations, with CIL consuming about 4.19 lakh kilolitres during FY2025-26. To ease the burden, the company is compensating contractors operating its mines for the higher diesel costs, as they procure fuel in bulk.

 

CIL said that any pass-through of these rising input costs could have a cascading effect on the economy, particularly on power and industrial users dependent on coal. In response, the company is also taking measures to ensure affordability and adequate supply. Some subsidiaries have reduced reserve prices of coal under the single window mode agnostic e-auction, while also increasing both the frequency of auctions and the quantity of coal offered.

 

Through these steps, CIL aims to maintain stable coal prices and ensure uninterrupted supply, even as input costs continue to rise sharply.