Israel-Iran war: Coal India says shielding consumers from cost spike; steps up supply measures

State-run Coal India (CIL) is absorbing a sharp rise in input costs to shield coal consumers from higher prices, even as global energy disruptions push up operational expenses amid the Israel-Iran war, the company said on Friday.

The company has chosen not to pass on the impact of rising costs of explosives and industrial diesel, a move aimed at preventing a cascading increase in power and industrial costs. CIL is also compensating contractors operating in its mines for the higher diesel prices, ensuring that production activity remains unaffected.

Absorbing input cost shocks

CIL’s decision comes amid a steep rise in key input costs linked to global factors. The price of ammonium nitrate (AN)—a key raw material used in explosives—has surged by 44 per cent, from Rs 50,500 per metric tonne earlier this year to Rs 72,750 per tonne as of April 1.


This has directly pushed up the cost of explosives used in mining operations by around 26 per cent, with average prices rising to Rs 49,783 per metric tonne by the end of March. CIL’s subsidiaries consume nearly 9 lakh metric tonnes of explosives annually.

Industrial diesel prices have also risen sharply, climbing about 54 per cent from Rs 92 per litre in mid-March to Rs 142 per litre at the start of April. CIL consumed about 4.19 lakh kilolitres of diesel in FY26.

Despite these increases, the company has opted to absorb the impact internally rather than pass it on to end users.

Steps to keep coal affordable

Alongside absorbing costs, CIL has taken multiple steps to ensure coal remains affordable and accessible.

Some of its subsidiaries have reduced reserve prices under the Single Window Mode Agnostic e-auction system. The company has also increased both the frequency of auctions and the quantity of coal offered, aimed at improving availability and stabilising prices.

These measures are intended to cushion consumers and industries from rising energy costs, particularly at a time when global uncertainties are pushing up fuel prices.

By maintaining stable supply and absorbing cost pressures, CIL is seeking to limit the broader inflationary impact on the economy and ensure continued access to affordable fuel.