Coal India Absorbs Rising Input Costs
Analysis based on 10 articles · First reported Apr 10, 2026 · Last updated Apr 12, 2026
Coal India's decision to absorb rising input costs is expected to stabilize coal prices in India, preventing inflationary pressures on power and industrial sectors. This move is positive for the broader Indian economy, though it may impact Coal India's short-term profitability.
Coal India is absorbing significant increases in input costs for explosives and industrial diesel, rather than passing them on to consumers. This decision aims to protect downstream industries and consumers in India from escalating energy costs and prevent a cascading inflationary effect across sectors. Prices for Ammonium nitrate, a key component in explosives, have surged by 44% to ₹72,750 per tonne, pushing average explosive costs up by 26%. Industrial diesel prices have also risen by approximately 54% to ₹142 per litre. Coal India consumes about 0.9 million tonnes of explosives and 4.19 lakh kilolitres of diesel annually. The company is also compensating contractors for higher diesel costs and has implemented measures like reducing reserve prices in e-auctions and increasing auction frequency to maintain affordability and supply stability.
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