Russia's energy minister on Tuesday denied reports of a compromise in its demand that Ukraine pay more than quadruple the current price for gas supplies amid an increasingly tense row that could see Russia shut the taps for the neighbor.
Industry and Energy Minister Viktor Khristenko dismissed as untrue statements by Ukrainian officials that Russia was prepared for a gradual switch to market prices in gas with Ukraine.
Khristenko's denial came just hours after Ukrainian Energy Minister Ivan Plachkov said such an agreement had been reached with Russian natural gas titan Gazprom.
Russia has made its final offer to Ukraine on gas supplies, Khristenko was quoted by the Itar-Tass news agency as saying. He added "Russia's proposals are based on an end to any barter settlements and on the transition to clear and transparent market rules in gas trade and transit."
Ukraine buys Russian gas at a discounted price of 50 US dollars per 1,000 cubic meters, but Gazprom, which is preparing to make its shares available to foreign investors next year, has demanded an end to the preferential price and offered cash payments for the transit of its gas to European clients.
Ukraine said it is willing to switch to market prices for Russian gas but insisted it needs a transitional period to adjust its economy.
Gazprom has suggested Ukraine uses shares in its gas transport system as payment for gas supplies if it does not have enough cash on hand, but Ukraine has rejected the proposal.
Ukraine will send Plachkov to Moscow on Wednesday for new talks on gas prices, the Interfax news agency reported.
Gazprom has threatened to shut the taps for Ukraine at on Jan. 1 if no deal is struck by then. The mounting feud over gas prices has raised fears that supplies to Ukraine could be halted, but the problem for Gazprom is how it can cut the flow to Ukraine without affecting its European client as 80 percent of its gas bound for Europe passes through a Ukrainian pipeline.