(Bloomberg) -- Indian coal prices have surged in auctions held by the country’s state-run miner, with domestic buyers rushing to secure supplies as global disruptions push up the cost of imported fuels.

Customers paid Coal India Ltd. an average premium of more than 340% above baseline prices in two sales this month, according to people familiar with the results, who requested anonymity as they are not permitted to speak publicly. That compares to premiums of about 100% in auctions in January. 

Coal India, the world’s top producer of the fuel, sells about 15% to 20% of its output through an online auction system in which consumers make offers above a minimum set price. Rates paid are typically far higher than the long-term contracts that account for the majority of sales.

Thermal coal loaded at Australia’s Newcastle port, a benchmark for seaborne supply in Asia, soared to a record last week as buyers shun Russian shipments and seek alternatives to pricey natural gas. That’s tightening a global market that was already squeezed by disruptions in other exporter nations.

“Spot e-auction prices reflect general market sentiment. It is the market response for coal that determines the premium,” Coal India said in a statement. The company declined to confirm specific details of the price.

Even with high premiums, locally produced coal remains far cheaper than importing the fuel from Australia or Indonesia. Coal with a heat value of 6,000 kilocalories per kilogram was sold for about 11,700 rupees ($153.70) a ton in March 11 auctions by Coal India. That’s less than half the price of a similar variety of coal at Newcastle on the same day.

Read more: India Industries Must Keep Importing Pricey Coal, Secretary Says

Coal India is also seeking to make the first major price increase since 2018 to long-term contracts, arguing that a hike is necessary to handle spiraling costs. India relies on coal to generate about 70% of its electricity.

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