Despite spiralling operational costs on account of increased prices of industrial diesel and explosives, state-run coal behemoth Coal India on Friday said it is absorbing the price shock insulating India’s coal users from escalating cost burden.
“Any pass through of the mounting prices would lead to a cascading effect. The company is also compensating the increased price of the industrial diesel to the contractors, operating in CIL’s mines, who purchase it in bulk quantities,” Coal India said in a stock exchange filing.
The cost of Ammonium Nitrate which makes up for around 60 per cent of the material composition in manufacturing of explosives, which Coal India uses in its opencast mines, increased by 44 per cent from pre-war level of ₹50,500 per ton to ₹72,750 per ton as of 1 April 2026.
Prior to the West Asian crisis Ammonium Nitrate prices applicable to CIL held steady from August 2025 till January 2026 before touching ₹50,500 per metric ton as of 1 March, 2026 and since then had taken an upward route.
This sharp increase in the price of Ammonium Nitrate had a direct bearing on the cost of explosives that CIL uses in large quantities in blasting operations to uncover overburden and expose coal seams. As a result, the average cost of explosives shot up by around 26 per cent from ₹39,588 per ton in February, 2026 to ₹49,783 per metric ton by March end.
Annually, CIL’s producing subsidiaries consume around 9 lakh metric tons of total explosives.
“Diesel was another important component where the price shot up. In most of CIL’s subsidiaries, the price of the industrial diesel increased by around 54 per cent from ₹92 per litre in mid-March 2026 to ₹142 per litre as of April 1, 2026,” Coal India said in the filing.
During the recently ended financial year 2025-26, the consumption of diesel was around 4.19 lakh kilo litres (KL).
At a time when the energy prices are surging ahead, apart from absorbing the price shocks, some of CIL’s subsidiaries have reduced the reserve price of coal in the Single Window Mode Agnostic e-auction. The company has also increased the frequency of auctions and the quantum of coal to be put under the auction.
“CIL intends to supply the dry fuel at an affordable price to the country’s citizens to cap the consequent costs,” it added.