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Coal India Absorbs Soaring Costs, Shields Consumers
12 Apr
Summary
- Coal India absorbs rising input costs like explosives and diesel.
- Company avoids passing price increases to consumers.
- Measures include lowering auction prices and increasing volumes.
State-owned Coal India is absorbing mounting input costs to ensure coal prices remain affordable for consumers. Expenses for essential items like explosives and industrial diesel have surged significantly following the West Asia conflict. The company has decided against passing these increased costs onto consumers, warning of a potential cascading impact across industries reliant on coal. Explosives costs alone have risen by approximately 26% due to a 44% increase in ammonium nitrate prices. Diesel prices have also seen a substantial jump of around 54%.
To counteract these pressures and cushion downstream industries, Coal India is implementing several strategies. These include lowering reserve prices in select e-auctions, increasing the frequency of auctions, and making higher volumes of coal available to the market. The company is also compensating contractors for increased diesel costs. These initiatives aim to maintain stable coal prices amidst broader volatility in global fuel markets, demonstrating a commitment to supporting the economy.
