Russian Prime Minister Vladimir Putin said Thursday that his government hadn't slapped gas fines on Ukraine as it didn't want to "finish off" a state on the verge of bankruptcy.
"Ukraine is currently not taking the volume which it has contracted and would have to pay fines," national television showed Putin telling miners in Novokuznetsk.
"We are forgiving these fines because we proceed from realities - they have nothing to pay with. They are in a pre-bankruptcy state, and you perfectly understand that you cannot finish off your partners," Ria-Novosti quoted Putin as saying.
Pro-Western Ukraine is in a balance of payment crisis because of plunging prices for its exports, rating agency Standard and Poor's said last week.
Russian Finance Minister Alexei Kudrin said earlier this week that the government hadn't yet decided on a $5 billion loan Ukraine had asked for.
Russia and Ukraine were locked in a protracted gas dispute in January that resulted in a cut in Russian gas deliveries for two weeks to a dozen European Union countries amid a cold winter spell.
Putin's comments were the latest in a series of caustic remarks about the country and its pro-Western president, Viktor Yushchenko.
Earlier this week, Putin cast doubt on Ukraine's reliability as a gas transit country after the Ukrainian security service, which answers to Yushchenko, raided the headquarters of the state gas company Naftogaz earlier this month.
"Only God knows what parts of their bodies the people who give these orders are thinking with," he said.