President Vladimir Putin accused Ukraine Wednesday of pushing gas talks toward a “dead-end” by asking for additional discounts.
He suggested that Russia's latest proposal to cut the current price of $485 per 1,000 cubic meters by $100 may be its final offer.
Ukrainian Prime Minister Arseniy Yatsenyuk said at a government meeting Wednesday the $100 "discount" is not a suitable substitute for the re-written contract Ukraine has been seeking.
"Russia has offered us a decrease of the gas price by $100 as a so-called discount. I want to state officially that we are familiar with such Russian traps. The discount is set by the government of the Russian Federation and can be canceled by the decision of the government of the Russian Federation," Yatsenyuk said.
The current contract the two countries signed in 2009 requires Ukraine to buy a set volume of gas from Russia, whether it needs it or not, and at the price of $485 per thousand cubic meters, the highest price paid by any customer in Europe.
Gas as 'political weapon'
Yatsenyuk said Ukraine was holding out for changes in state gas company Naftogaz's contract with Russian exporter Gazprom and demanded to pay the market price for gas.
“We demand changes in the contract. If gas is a political weapon, then it is clear that it is a political weapon in the hands of the Russian government. And if gas is a commodity, as all over the world, then we are trading on the basis of the contract and not on the basis of whether Russia likes or dislikes the Ukrainian government,” Yatsenyuk said.
Officials from both sides held negotiations Wednesday in Brussels as they try to resolve the dispute on pricing and Ukraine's multibillion-dollar energy debt.
Further negotiations could take place by phone before Monday, when Moscow has threatened to halt supplies. If it goes through with its threat, it could affect supplies to other parts of Europe. The European Union gets about a third of its gas imports from Russia and around half of that amount it receives through pipelines that cross Ukraine.
Gazprom CEO Alexei Miller told Russian news agencies on Wednesday that Russia is giving Ukraine until next Monday before implementing a new requirement to pre-pay for any new gas.
Russia and Ukraine are negotiating ways for Kyiv to clear its outstanding debts, the amount of which is being disputed. Kyiv has been late with payments, prompting Russia to threaten to demand payment up front for future deliveries or it might restrict supplies.
Russia canceled price discounts for Ukraine following the ouster of pro-Russian President Viktor Yanukovych. Ukraine has been seeking a new price agreement before settling debts.
The discussions are going on alongside other efforts to defuse the crisis in eastern Ukraine, where Ukrainian forces have been carrying out an operation to retake control from pro-Russian separatists.
'Evacuation' corridor suggested
On Tuesday, Ukraine's President Petro Poroshenko ordered the creation of "evacuation" corridors to allow people to escape the fighting and for the government to assist in the movement of refugees and in the distribution of medical services in the largely Russian-speaking east.
Russian Foreign Minister Sergey Lavrov welcomed the Poroshenko directive as "a step in the right direction."
In Kyiv Tuesday, visiting U.S. Assistant Secretary of State Victoria Nuland pledged U.S. support for economic development and efforts to stabilize eastern Ukraine.
She also again congratulated the Ukrainian people for last month's "free and fair" presidential election.
Some information for this report provided by Reuters and AP.