Ukrainian Fuel and Energy Minister Yuriy Boyko said on Tuesday cooperation with Russia in energy could be acceptable only on a parity basis.
Prime Minister Vladimir Putin proposed a merger between Russian gas giant Gazprom and Ukrainian Naftogaz on April 30. His spokesman said this meant the creation of a new company but not the absorption of Ukraine's gas monopoly.
"We are considering the proposals from our Russian partners only on parity conditions, this is our principal position," Boyko told journalists when asked about the Russian proposal.
Russian leader Dmitry Medvedev said ahead of his official visit to Ukraine on May 17-18 the deal would allow the asset swap or the establishment of a joint venture. His Ukrainian counterpart Viktor Yanukovych said he agreed to a fifty-fifty deal.
The proposed merger has caused criticism from the Ukrainian opposition, which claims the creation of the joint venture means the de-facto acquisition of Naftogaz by Gazprom and thus the loss of Ukrainian energy independence.
The Ukrainian fuel and energy minister said that dialogue with Russia would lead to the lowering of gas prices, which will bring about a more rapid development in Ukrainian industries and reduce social problems in the country's economy.
"The lowering of gas prices will naturally lead to a more effective development in our industries, lower communal tariffs (cost of utilities), and to an overall increase in the welfare of people," Boyko said.