India’s energy system is showing early signs of stress due to geopolitical disruptions in West Asia, impacting global supply chains and energy flows through key routes such as the Strait of Hormuz.

The disruptions have affected supplies of LNG, CNG and LPG, prompting industrial users to increasingly shift towards coal as an alternative fuel. India imports nearly 45–50 per cent of its natural gas as LNG, making it vulnerable to global supply constraints and shipping uncertainties.

While gas-based power capacity remains underutilised at below 25 per cent plant load factor, coal and renewables continue to dominate the power mix, helping insulate the sector. However, industrial clusters are witnessing supply challenges, reinforcing coal’s role as a fallback option.

India’s coal demand has crossed 1.25 billion tonnes annually, driven by sectors such as power, cement and sponge iron. Coal India’s e-auction premiums have risen to around 35 per cent over notified prices in February 2026, indicating tightening demand.

Commenting on the trend, Mr. Vinaya Varma, MD & CEO, mjunction services limited, said, “What we are witnessing is an early but clear behavioural shift in fuel consumption patterns. As LNG availability tightens and CNG/LPG supplies face disruption in several industrial clusters, buyers are increasingly turning to coal to secure operational continuity. The rise in e-auction premiums and improved offtake reflects this urgency. Coal will continue to play a critical role in ensuring India’s energy security, especially in times of global uncertainty. While we are witnessing localized tightening in demand and firming of prices, the overall market remains balanced due to strong domestic availability and adequate stock levels.”

Despite rising demand signals, the market remains stable, with only around 47 per cent of auction volumes sold so far and power plant coal stocks at 18–20 days of consumption, indicating no immediate supply crisis.