State-owned Coal India Ltd. is stepping in to protect consumers from potential price spikes, absorbing significant increases in input costs. This strategic move aims to maintain affordable coal supplies despite sharp rises in expenses for key materials.
The company confirmed it will not pass on these mounting costs to the market. Officials warned that doing so could trigger a severe and cascading impact across various sectors dependent on coal.
Impact of West Asia Conflict on Mining Inputs
Rising expenses for crucial mining inputs have placed intense cost pressures on Coal India. These surges were largely attributed to developments following the West Asia conflict.Ammonium nitrate, a key explosive component, saw its price jump by 44%. This material is vital, accounting for approximately 60% of explosives used in opencast mining operations.
The average cost of explosives, consequently, climbed by around 26%. This pushed the average cost to nearly ₹ 49,800 per tonne by the end of March.
Soaring Costs of Diesel and Explosatives
Diesel prices have also witnessed a substantial escalation. The price rose roughly 54%, moving from about ₹ 92 in mid-March to ₹ 142 per litre.For the 2025-26 fiscal year, the company consumed approximately 4,19,000 kilolitres of diesel. Furthermore, Coal India is compensating contractors operating in its mines directly for the higher costs of industrial diesel.
The increased cost of ammonium nitrate directly impacted the explosives bill. The average cost of explosives shot up by around 26%, moving from ₹ 39,588 per metric tonne in February 2026 to ₹ 49,783 per metric tonne by March end.
Measures Taken to Keep Coal Supplies Affordable
Despite these escalating costs, Coal India has implemented several measures to ensure market stability. These proactive steps are designed to cushion downstream industries and consumers.The company has taken steps including lowering reserve prices in select e-auctions. Additionally, Coal India has increased both the frequency of auctions and the total volume of coal put up for auction.
These efforts underscore the commitment to maintaining stable coal prices amid broader volatility within the fuel markets.
Market Outlook and Consumer Protection Commitment
Coal India intends to ensure the supply of dry fuel at an affordable price point for the country's citizens. The board confirmed absorbing the entire cost related to explosives, totaling expenditures for its subsidiaries' annual consumption of about 0.9 million tonnes.The strategy reflects a move to prevent energy cost inflation from hitting the general consumer base. Coal India continues to manage input price volatility to sustain market accessibility.
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