Ukrainian Prime Minister Yulia Tymoshenko said on Monday her government was working on a gas supply agreement with Russia that would keep the price at the current level. Russia has raised gas prices steeply since 2005, although at $179.50 per 1,000 cubic metres, Ukraine still pays less than the European market price. Russia`s gas export monopoly Gazprom had suggested it could double that price to around $400, Reuters reported.

"We are at the moment working to retain the 2009 gas price as it is today. We are working on this, but an agreement has not yet been signed," Tymoshenko told metal industry businessmen.

Tymoshenko said last month the two countries had agreed Ukraine would pay a market price within three years. Gazprom said last month the European price had reached an all-time high above $500.

Disputes between Kiev and Moscow over prices and debts have led to gas supply cuts. One such cut in January 2006 briefly affected European countries, which receive just under a quarter of their gas needs from Russia via Ukraine.

Reuters via Guardian