State-run Coal India Limited (CIL) has temporarily stopped supplying non-power users, the company said in a statement on Thursday, as India battles one of its worst power supply deficits in years.
India is the world’s second largest coal producer, with the world’s fourth largest reserves, but a surge in power demand to above pre-pandemic levels means state-run Coal India’s supplies are no longer enough.
Coal India said it had stopped all online auctions of coal except those meant for the power sector.
“This is only a temporary prioritisation, in the interest of the Nation, to tide over the low coal stock situation at the stressed power plants and scale up supplies to them,” it said.
Most of India’s 135 coal-fired power plants have fuel stocks of less than three days.
India is competing against buyers such as China, the world’s largest coal consumer, which is under pressure to ramp up imports amid a severe power crunch.
The company noted that Indian customers have turned to using local coal due to higher global prices of the fuel.
Government has asked power producers to import up to 10 per cent of their coal needs amid fuel shortages and has warned states that federal companies will curb their power supplies if they are found selling electricity on power exchanges to cash in on surging prices.