Wednesday, June 21 2006 19:23 Hrs (IST) - World Time -

Tehran: Iran will not sell its gas at knock-down rates to India and Pakistan, a senior oil official said today (June 21,2006) amid a pricing dispute in talks over a planned pipeline.

"The price suggested by India and Pakistan is almost half of the price we offered," deputy oil minister Mohammad-Hadi Nejad-Hosseinian said on state radio.

"If the two governments intend to subsidise their domestic gas, there is no reason for Iran to pay this subsidy," he added.

The Iran-Pakistan-India gas project envisages a pipeline of about 2,600 kilometres that would help meet South Asia's growing energy needs.

The United States has voiced opposition to the project, reflecting concerns about Iran's nuclear ambitions and the three parties engaged in the discussions have also been at odds over pricing.

Quoted by the Iranian oil ministry's Shana news agency, Nejad-Hosseinian said Iran was not desperate to sell its gas to India and Pakistan.

"The tripartite Peace Pipeline agreement is not an absolute obligation," he said.

He also warned India and Pakistan that if the nuclear issue is resolved, other countries 'will be the first customers of our gas (and will pay) even better prices.'

The official also said there was disagreement with India and Pakistan over the amount of gas to be exported with Iran unwilling to sell a large chunk of its planned daily exports of 480 million cubic meters to just two countries.

"We think it is better for us to have various customers," he said.

The three sides held their last round of talks on the project in May.