India has cut coal supplies to the non-power sector and put on hold plans to increase the number of fuel auctions for utilities due to a slump in inventories at state government-owned utilities even as demand for electricity surges.
The supply cuts come months after India's most crippling coal shortage in the recent years led to power cuts lasting upto 14 hours in some states. The onset of summer has added to worries about power supply shortages in the country.
State-run Coal India, which accounts for more than 80% of domestic output, has slashed supplies to the non-power sector - which includes aluminium smelter and steel mills - to 275,000 tonnes a day, according to an internal note reviewed by Reuters, 18.3% lower than February and 29.8% lower than March 2021.
The federal coal ministry has also put on hold a plan to conduct three coal auctions for utilities over the next three months and will organise one auction for the quarter instead, saying the methodology to conduct three auctions was "under process".