Kiev - Ukraine has rejected a proposal by Moscow for what would amount to a $100 reduction in the price Kiev pays for Russian natural gas, Prime Minister Arseny Yatseniuk said on Wednesday.

Briefing his cabinet on talks on the pricing dispute with Moscow, he said Ukraine was holding out for changes in state gas company Naftogaz's contract with Russian producer Gazprom and said it should pay the market price for gas.

Russia has floated the idea of scrapping its export duty for gas exports to Ukraine - $100 per 1,000 cubic metres, introduced after Moscow annexed Crimea - to reduce the price.

The dispute is at the heart of the crisis between Russia and Ukraine, and failing to resolve it would set back peace moves that are gaining momentum after weeks of violence in eastern Ukraine.

“Russia has offered us a gas price cut of $100,” Yatseniuk said in televised comments.

“Our position remains the same: we rewrite the contract and get the market price.”

Ukraine wants to change the 2009 contract that locked it into buying a set volume of gas, whether it needs it or not, at $485 per 1,000 cubic metres - the highest price paid by any customer in Europe.

Russia and Ukraine were due to resume talks in Brussels on Wednesday after eight hours of negotiations, which ended around 3 a.m. (03:00 SA time) on Tuesday, failed to overcome differences over pricing.

Gazprom said it had moved a deadline for Ukraine to start paying in advance for its gas supplies to next Monday.

If supplies are cut to Kiev, there could be disruptions to deliveries to the European Union as some of the gas it receives comes through pipelines via Ukraine. - Reuters