Friday, July 28 2006 10:19 Hrs (IST) - World Time -

New Delhi: A day after rejecting Reliance Industries' proposal to sell gas to an Anil Ambani Group firm, the Government yesterday (July 27, 2006) said public exchequer cannot subsidise private deals.

"The gas price proposed in the deal would have led to huge financial loss to the Government in the form of lower royalty and lower profit petroleum. Public exchequer cannot subsidise private deals," a top Petroleum Ministry official said.

RIL's proposal to sell gas to Reliance Natural Resources Ltd, a Reliance-Anil Dhirubhai Ambani Group firm, at 2.34 dollars per million British thermal unit (Btu) has come under cloud.

The controversy over the deal, which is part of the settlement between the the two Ambani brothers, surfaced in the last few months with younger brother Anil's group alleging that Mukesh's group was 'systematically violating' the family pact.