Government company Coal India Limited is itself bearing the burden of increasing input costs to protect consumers from rising coal prices. This is happening when the prices of essential inputs like explosives and industrial diesel have increased rapidly due to the ongoing conflict in West Asia. The company said that it has decided not to pass the burden of this increased cost on the consumer. The company has warned that if this is done, it may have a negative impact on other sectors dependent on coal.
Apart from this, the company is also compensating the increased prices of diesel to the contractors working in its mines. Prices of ammonium nitrate—which accounts for about 60 percent of the explosives used in opencast mining—have risen 44 percent from pre-war levels to Rs 72,750 a tonne as of April 1.
Due to this, the average cost of explosives has increased by about 26 percent to Rs 49,800 per tonne by the end of March. Coal India’s subsidiaries use about 0.9 million tonnes of explosives every year. The company said that Coal India itself is bearing the burden of this entire cost.
have taken many steps
Diesel prices have also increased rapidly. The price which was around Rs 92 per liter in mid-March, has increased by almost 54 percent to Rs 142 per liter. During the financial year ending March 2026, the company used about 4,19,000 kiloliters of diesel. Despite cost pressure, Coal India has taken several steps to keep coal supply affordable. These include reducing the reserve price in select e-auctions, increasing the frequency of auctions and making more quantity of coal available in the market. The aim of these measures is to protect coal-dependent industries and consumers from the adverse effects of rising energy costs. The company aims to maintain stable coal prices despite wide fluctuations in fuel markets.
Ammonium nitrate price rises
Officials said that if the burden of rising prices is passed on to consumers, it will affect many sectors one after the other. Apart from this, the company is also compensating the increased prices of industrial diesel to the contractors working in CIL mines who purchase it in large quantities. Before the crisis began in West Asia, ammonium nitrate (AN) prices for Coal India Limited (CIL) had remained stable from August 2025 to January 2026.
After this, on March 1, 2026, these prices increased to Rs 50,500 per metric ton, and since then they are continuously increasing. This sharp increase in the price of ammonium nitrate had a direct impact on the cost of explosives, which CIL uses in large quantities in blasting operations to remove overburden and expose coal seams. As a result, the average cost of explosives increased by nearly 26 per cent from Rs 39,588 per metric tonne in February 2026 to Rs 49,783 per metric tonne by the end of March, it is reported.
Reduction in reserve price of coal
In the just concluded financial year 2025-26, diesel consumption stood at around 4.19 lakh kiloliters (KL). One KL is equal to 1,000 litres. At a time when energy prices are rising rapidly, apart from absorbing the price shocks themselves, some of the subsidiaries of CIL have also reduced the reserve price of coal in the ‘single window mode agnostic e-auction’. Officials said that the company has also increased the frequency of auctions and the quantity of coal put up for auction. CIL intends to provide this ‘dry fuel’ (coal) to the citizens of the country at an affordable price, so as to control the resulting rising costs.