State-owned CIL reported an 11.6% on-year fall in coal production in May, with output slipping to 56.1 million tonnes (MT) even as the country's power demand surged to an all-time high.

Coal India Ltd (CIL), which accounts for over 80% of domestic coal output, had reported coal production of 63.5 MT in May last year.

However, the company did not share the reason for the decline in production.

CIL's subsidiaries whose production declined during May include Mahanadi Coalfields Ltd (MCL), Western Coalfields Ltd (WCL), Bharat Coking Coal Ltd (BCCL) and Eastern Coalfields Ltd (ECL).

The subsidiary which registered positive growth in May was South Eastern Coalfields Ltd (SECL), CIL said in a regulatory filing.

Coal production in the April-May period also dropped by 10.6% to 112.2 MT over 125.6 MT produced in the year-ago period.

According to industry analysts, the timing of the drop coincides with a sharp spike in electricity demand, putting pressure on coal stocks at power plants and raising the stakes for domestic supply security.

They said the combination of record power demand, a domestic production dip, and geopolitical uncertainty in West Asia could make the next few weeks critical for the country's fuel security.

However, Coal India's offtake, or sales to customers, rose by 2.2% to 66.7 million tonnes in May.

CIL's sales to customers also increased by a marginal 0.9%, 130.9 MT in the April-May period, over 129.8 MT in the year-ago period.

India's peak power demand hit a record high of 270.82 GW on May 21, surpassing its previous record of 265.44 set on May 20.

According to the power ministry estimates the peak power demand would reach 270 GW this summer.

CIL's output dropped by 1.7% to 768.1 million tonnes in FY26, over 781.1 MT in FY25.

The company's coal offtake during FY26 also declined 2.4% to 744.8 MT from 763 MT in FY25.

CIL is the main fuel supplier to the country's power sector, providing the bulk of coal required by thermal power plants. Its role is central to energy security, especially as coal still accounts for roughly 70% of India's power generation, even amid rapid growth in renewables.

CIL operates through eight main fully-owned producing subsidiaries, a planning/consultancy wing, and a foreign subsidiary in Mozambique.