The chief of Russian state-run natural gas giant Gazprom said that gas supplies to Ukraine would be cut off if no new contract deal is reached by Jan. 1.
Gazprom CEO Alexei Miller's threat, reported by RIA-Novosti, comes amid an increasingly bitter dispute between Kiev and Moscow over natural gas prices and supplies.
Russia has proposed more than tripling the price it charges Ukraine for gas from the current US$50 per 1,000 cubic meters. Ukraine has rejected the proposal, saying it would make factories unprofitable.
About 80 percent of the natural gas Russia exports to Europe passes through Ukraine, which gets almost half of its gas imports from Russia.
A spokesman for state-run company Naftogaz Ukraina had no immediate comment.
On Monday, Ukrainian President Viktor Yushchenko promised that his country would guarantee Russian natural gas deliveries to Europe and proposed an agreement whereby Ukraine would shift gradually to paying market prices.
According to the AP Miller's spokesman Sergei Kuprianov, however, said in comments on state-run television that the proposal was "absolutely unacceptable." Such an arrangement could stretch the process over several years, he is sure.