Due to the war that broke out between Iran and Israel, there is a fuel crisis all over the world, which is now directly impacting the coal market of our country. According to the latest report of Coal India Limited (CIL), a huge jump in prices has been seen in the e-auction of coal held in the month of February 2026. In this auction, companies have paid an average 35% more than the actual price fixed by the government to buy coal. Due to the fear of stopping the supply of gas and oil across the world, Indian industries have started buying domestic coal at record high prices.
Due to the Iran war, the supply of LNG and crude oil coming from Gulf countries is under threat. When gas became expensive in the international market, Indian electricity and steel companies increased the use of coal instead of gas. This sale of coal is done through ‘e-auction’, which is a kind of online bidding. In this, Coal India puts its coal for auction on the internet and the company that bids the highest gets the coal. In this auction held in February 2026, there was a huge competition among the companies to grab coal.
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auction figures
According to Coal India report, a total of 205.92 lakh tonnes of coal was offered for auction during February 2026. According to the detailed report of this auction, ‘Mahanadi Coalfields Limited’ (MCL) has benefited the most. In February 2026, the maximum of 72.84 lakh tonnes of coal was allocated to MCL alone. This company based in Odisha extracts such a large quantity of coal so that the needs of big power plants of the country can be met. This company invests a large part of its coal in the power sector so that there is no shortage of electricity in the country in the coming summer. If we look at the accounts of the entire year (April 2025 to February 2026), till now a total of 884.04 lakh tonnes of coal has been sold, on which the average profit has been 37%.
Where and how much did coal become expensive?
The prices of coal also differed according to the demand and shortage in different states and areas of the country. Coal India’s report shows that there was a huge shortage of coal in North-East India (NEC), hence it was sold there at a price 80% more than its original price. Similarly, there was huge demand in areas like Madhya Pradesh and Chhattisgarh (NCL and SECL), where coal was sold at a cost of 43% to 47%. In contrast, coal stock in Odisha areas (MCL) was quite good, hence the lowest price increase was recorded there i.e. only 17%.
Low supply and high prices
On the other hand, North Eastern Coalfields (NEC) has been allotted the least amount of coal in this auction. In February 2026, NEC could get only 0.15 lakh tonnes of coal. This company, which works in Assam and North-East areas, had the highest demand due to less quantity of coal and coal was sold at a cost of up to 80% of its original price. Apart from this, Eastern Coalfields (ECL) has also got much less allocation with 6.30 lakh tonnes.
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Challenge of power houses
As the month of March ends, the heat in India has increased, due to which the demand for electricity will also increase rapidly. Due to the Iran war, generating electricity from gas is now becoming very expensive, so now the entire pressure has come on coal-fired power plants. Electricity companies fear that if the war continues longer, coal may become more expensive in the future, so they are already accumulating stocks for their needs. Experts believe that if the tension in the international market is not reduced, prices may increase further.
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