The share price of Coal India Limited (CIL) soared this week amid anticipation that power demand will surge this summer.
On Friday, the stock price of the largest coal producing company in the world slipped to ₹462.30, down from the previous close of ₹470.10. Despite the decline, the stock is still up by nearly 5% over the past five trading days.
Coal Dependent Country
India is the world’s second-largest producer and consumer of coal, importing around 15% of the coal it consumes. Adequate supply is crucial as coal generates 70% to 87% of the country’s electricity despite efforts to ramp up the nation’s renewable energy capacity.
CIL, which supplies more than 80% of India’s domestic coal, rallied this week as the country braces for higher temperatures.
The government is expecting that power demand will rise due to the onset of summer and a possible increase in the use of electric cookware and battery-powered infrastructure as gas supplies tighten.
The war in West Asia involving Iran and US allies raised concerns of potential cooking gas shortage despite the government’s order that households will get priority in LPG supplies.
“Currently, LPG is being directed to the domestic sector. For non-domestic LPG, priority is being given to essential sectors such as hospitals and educational institutions. The committee is consulting with state authorities and industry bodies to finalise the plan to ensure that available LPG is distributed fairly and transparently,” said Sujata Sharma, Joint Secretary (Marketing & Oil Refinery) in the Ministry of Petroleum and Natural Gas, according to the Times of India.
Ready for Spike in Coal Demand
The Coal Ministry said that the country’s total coal stock of 210 million will be sufficient for around 88 days. It also assured consumers of the country’s readiness for the coal demand spike, citing that consumption in FY 2025-2026 is lower than the production and supply.
Source: https://coinpaper.com/15413/coal-india-stock-gains-5-as-summer-power-demand-surges
