Coal India Limited (CIL) is proactively absorbing the impact of surging operational costs, particularly for explosives and industrial diesel, to prevent a cascading price rise for Indian coal users. By shouldering these increased expenses and optimizing its auction processes, the company remains committed to maintaining affordable coal prices for the nation’s citizens despite global market volatility and inflationary pressures on key raw materials.
Combating Rising Operational Costs
Coal India Limited (CIL) has announced a strategic decision to absorb significant price hikes in key input materials, specifically Ammonium Nitrate (AN) and industrial diesel. These increases, driven by global market conditions, posed a threat of higher costs for coal consumers. By absorbing these shocks, CIL aims to insulate the Indian economy from the potential inflationary impact of energy cost escalation.
Escalation in Raw Material Prices
The financial impact of these commodities has been substantial. The cost of Ammonium Nitrate, which constitutes nearly 60% of the material used in manufacturing explosives for opencast mining, surged by 44%—climbing from Rs. 50,500 to Rs. 72,750 per metric ton as of April 1, 2026. Consequently, the average cost of explosives utilized by CIL rose by approximately 26% between February and March 2026.
Similarly, industrial diesel costs saw a sharp increase of approximately 54%, rising from Rs. 92 per litre in mid-March 2026 to Rs. 142 per litre by the start of April. CIL’s annual consumption of explosives stands at 9 Lakh metric tons, while diesel consumption reached 4.19 Lakh Kilo Litres (KL) during the 2025-26 fiscal year.
Strategic Market Interventions
Beyond absorbing direct price shocks, CIL has implemented operational measures to stabilize the market. Certain subsidiaries have reduced the reserve price of coal in the Single Window Mode Agnostic e-auction. Additionally, the company is increasing the frequency of its auctions and the total quantum of coal offered to the market. These proactive steps are designed to ensure that dry fuel remains available to the public at an affordable price, thereby capping the secondary costs to the country’s citizens.
Source: BSE
