CIL Absorbs Price Shock from Rising Costs

New Delhi, Apr 10 (PTI) State-owned CIL on Friday said it has absorbed the price shock from rising operational costs, including higher prices of explosives and industrial diesel, as any pass-through would trigger a cascading effect, and stressed that the company is committed to supplying the dry fuel at affordable prices.

Coal India Ltd (CIL), which accounts for over 80 per cent of domestic coal output, is also compensating the increased price of the industrial diesel to contractors operating in its mines, who purchase it in bulk quantities.

The cost of ammonium nitrate, which makes up around 60 per cent of the material composition in the manufacturing of explosives, which CIL uses in its opencast mines, increased by 44 per cent from the pre-war level of Rs 50,500 per metric tonne to Rs 72,750 per metric tonne as of April 1, 2026.

Before the West Asian crisis, ammonium nitrate prices applicable to CIL held steady from August 2025 till January 2026 before touching Rs 50,500 per metric tonne as of March 1, 2026 and since then have 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, the PSU said in a filing to BSE.

As a result, the average cost of explosives shot up by around 26 per cent from Rs 39,588 per metric tonne in February 2026 to Rs 49,783 per metric tonne by March-end.


Annually, CIL's producing subsidiaries consume around 9 lakh metric tonnes of total explosives.

Diesel was another important component which has witnessed a rise in price. In most of the CIL's subsidiaries, the price of the industrial diesel increased by around 54 per cent from Rs 92 per litre in mid-March 2026 to Rs 142 per litre as of April 1, 2026.

During the 2025-26, the consumption of diesel was around 4.19 lakh kilo litres (KL). One KL is equivalent to 1000 litres.

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 a single window mode, an 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 to cap the consequent costs.

Coal India said its production dropped by 1.7 per cent to 768.1 million tonnes in 2025-26. The company produced 781.1 million tonnes in FY'25.