Ukrainian President Viktor Yushchenko rejected on Thursday Russia's offer of a multi-billion-dollar loan to help his country adjust to a four-fold increase in gas prices demanded by Russia's state-run gas monopoly Gazprom.

"Ukraine does not need these credits. Ukraine will rely on its own resources under a clear, correctly and objectively formed price," said Yushchenko in a televised speech delivered after a second day of talks between the two countries.

He also called the price rise "a provocation."

The row came after Gazprom threatened to stop supplying gas to Ukraine on New Year's Day unless Kiev agrees to pay the world market prices, which mean 220-230 U.S. dollars per 1,000 cubic meters instead of the 50 dollars it pays now.

Russia offered to loan up to 3.6 billion dollars to help Ukraine prepare for the price hike.

Kiev argued that the "objective" price for the Russian gas in Ukraine now is 75-80 dollars, not 50 dollars.

It also suggested that the price increase be phased in gradually, such as with a three-year transition period, because sudden and huge hikes would hurt the country's heavy industries.

The two countries were to resume talks on Friday.

Also on Thursday, Yushchenko decreed that gas and electricity prices for all consumers would rise to "an economically founded level" and called on authorities to find ways to cut energy consumption.

Ukraine relies on Russia for about a third of its gas and Turkmenistan for 45 percent.

Source: Xinhua