New Delhi: Petroleum Minister Murli Deora has turned down Reliance Industries' gas sale to Anil Ambani Group firm.
In a decision that may hit the proposed 7,480 MW Dadri power project of the firm, Government on Wednesday rejected Mukesh Ambani headed RIL's proposed selling price of gas to RNRL based on the de-merger agreement between the Ambani brothers.
Petroleum ministry has decided to set up a committee to suggest guidelines for gas pricing and all future gas deals will follow the guidelines set by the committee.
Rejecting the proposed price of $2.34 per mBtu as significantly lower than the prevailing market price, petroleum ministry said in a statement "the transaction between RIL and RNRL is part of their (Ambani brothers' settlement) de-merger agreement and therefore does not meet the PSC criteria of Arms-Length Sales."
Concluding the evaluation exercise of the Ministry, Deora approved the recommendations made by his Secretary M S Srinivasan on Tuesday, sources in know of the development said.
Gas supply agreement had become the bone of contention between the Ambani brothers, with ADAG sources on Tuesday alleging that Mukesh's group was looking to "dishonour" the agreement and was using media to spread misinformation on the Government of India's approvals for the supply pact.
Terming the decision as a "matter between Government and RIL," an RNRL spokesperson said, "RIL's obligation to supply gas to NTPC and RNRL at the previously agreed price was not affected."
On the other hand, RIL officials said, "We are examining the order".
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