Coal India Ltd Insulates Coal Users from Rising Input Costs

Coal India Ltd Insulates Coal Users from Rising Input Costs​

Coal India Limited (CIL) announced that it is absorbing price shocks related to increased operational costs, thereby insulating India's coal users from escalating cost burdens. This initiative is crucial as any passing through of mounting prices could lead to a cascading effect across the sector.

The company is managing rising input costs for both explosives and industrial diesel. CIL is also compensating contractors operating in its mines who purchase industrial diesel in bulk quantities for the increased price.

Explosives and Diesel Cost Increases​

The cost increases were notable for key materials used in CIL's opencast mines. The price of Ammonium Nitrate (AN), a component making up around 60% of the material composition for explosives, saw a significant rise. AN prices increased by 44 percent from a pre-war level of Rs.50,500 per metric ton to Rs.72,750 per metric ton as of April 1, 2026. Previously, AN prices for CIL had remained steady from August 2025 through January 2026, before reaching Rs.50,500 per metric ton as of March 1, 2026, and subsequently rising.

This sharp escalation in AN prices directly impacted the cost of explosives used in blasting operations. Consequently, the average cost of explosives rose by about 26 percent, moving from Rs.39,588 per metric ton in February 2026 to Rs.49,783 per metric ton by the end of March. Annually, CIL's producing subsidiaries consume approximately 9 Lakh metric tons of explosives.

Diesel prices also experienced a sharp increase. In most CIL subsidiaries, the industrial diesel price increased by about 54 percent, rising from Rs. 92 per litre in mid-March 2026 to Rs. 142 per litre as of April 1, 2026. For the recently concluded fiscal 2025-26, the total diesel consumption was around 4.19 Lakh Kilo Litres (KL), noting that one KL is equivalent to 1000 Litres.

Operational Measures and Supply Commitments​

In addition to absorbing these price shocks, some of CIL's subsidiaries have reduced the reserve price of coal in Single Window Mode Agnostic e-auction. The company has also increased both the frequency of auctions and the quantum of coal being put up for auction.

Coal India Limited intends to supply dry fuel at an affordable price to the country's citizens to cap subsequent costs.

COALINDIA Stock Price Movement​

Shares of Coal India Limited are edging higher to ₹454.7 as of 12:40 PM today, gaining 0.13% in live trading. The stock continues to see significant interest, supported by over 6.17 million shares traded in the market so far.

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