Friday, November 14, 2008

Government cries off Mukesh-Anil gas row

A dispute between estranged industrialist brothers Mukesh and Anil Ambani over the price of gas one’s company would buy from the other’s has taken a new twist the government distancing itself from the issue.
The Government of India told the Bombay High Court in an affidavit filed on Friday that it will not influence the price that Reliance Industries Ltd (RIL) would charge Anil Ambani-controlled Reliance Natural Resources Ltd (RNRL) for gas from the Krishna-Godavari basin.
The government said gas from the basin to be sold to any agency other than the government or its nominees will be treated at market rates.
Both companies declined comment as the matter is before courts. However, sources indicated that RNRL is preparing to file a counter-affidavit by November 25.
The affidavit said RIL approached the Centre to seek approval for a price formula but it was “rejected by the government for not having been based on an arm’s length transaction.”
RNRL wants the sale of natural gas at a preferential rate of $2.34 per unit of gas (MMBTU), against the government approved rate of $4.20 per unit.

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