KIEV, February 22 (RIA Novosti) - Ukraine's Cabinet believes a joint venture between Naftogaz and Gazprom to sell gas on Ukraine's domestic market would be impractical, the first deputy prime minister said Friday.

"We believe there is no need to create a JV to operate on the domestic market. Ukraine's national oil and gas company Naftogaz is capable of handling sales itself," Oleksandr Turchinov told journalists.

Earlier Turchinov said Russian energy giant Gazprom demanded a new system for natural gas supplies from Russia be formalized by April, with Gazprom and Naftogaz setting up two new parity-basis companies to manage gas deliveries and sales on Ukraine's domestic market.

The presidents of Russia and Ukraine agreed on a roadmap last week to settle Kiev's $1.5 billion debt for Russian gas supplies, with Ukraine's Viktor Yushchenko promising that his country would pay off the debt.

Gazprom has threatened to halt supplies if Ukraine fails to pay back $1 billion before March 14. An agreement was also reached to establish direct fuel supplies between Gazprom and Naftogaz.

The two new companies will replace RosUkrEnergo, which holds a monopoly on gas exports, and gas import monopoly UkrGazEnergo. The Ukrainian government has already ruled to liquidate the latter.