Coal India's sales rise for first time in six months on gas crunch, summer demand

By Sethuraman N R

NEW DELHI, April 1 (Reuters) - Coal India's COAL.NS sales in March grew for the first time in six months, the company said on Wednesday, indicating a ramp-up in coal stocks ahead of peak summer amid a shortfall in gas supply due to the U.S.-Israeli war against Iran.

Coal India's offtake, or sales to customers, rose 0.7% to 69.5 million tons in March, despite a 1.5% drop in its provisional output to 84.5 million tons, the company said in a stock exchange filing.

The state-run company accounts for over 80% of the country's production and is the world's largest coal miner by output.

Coal India's offtake fell for six consecutive months after a 7.6% jump in August, boosting inventory levels at power plants as temperate weather dented India's power demand in 2025.

The higher stocks have kept import demand subdued despite the peak summer season approaching, said Vasudev Pamnani, director at Gujarat-based coal trader iEnergy Natural Resources.

Domestic coal remained relatively more attractive in certain segments, he said, adding that disruptions in liquefied natural gas supply and reduced gas-based power generation are expected to boost reliance on coal for power generation.

India, which relies on coal for nearly 75% of its power generation, is expected to lean more on the polluting fuel during the summer due to the gas shortage, Reuters reported in March.

Although gas accounts for only around 2% of India's total power generation, the South Asian country uses about 8-10 gigawatts (GW) of gas power during peak-demand periods or heatwaves.

In the absence of gas, India has asked its coal plants to run at maximum capacity and avoid planned outages, and has also asked industries to produce their own power through their captive generation plants to free up supplies for households.

India is set to experience a hotter-than-normal summer this year, with heat wave days in May expected to exceed the seasonal average.