However Medvedev, also a Russian first deputy prime minister, said the country was prepared to adopt a new supply scheme for Russian gas after Ukraine pays its debt for previous gas deliveries.
"We could start direct gas supplies tomorrow as long as money is paid. If they want gas from Central Asia, an intermediary firm will evidently have to be preserved," Medvedev said.
The statement came following Tuesday's last-minute deal between the former Soviet allies to avoid a reduction in supplies threatened by Gazprom if Kiev failed to pay off its $1.5 billion gas debt. Ukraine agreed to start paying the debt on Thursday, and Russia agreed to remove intermediary traders.
The latest gas row raised concerns in Europe, where consumers were affected by a bitter pricing dispute between Moscow and Kiev at the start of 2006, when Europe-bound supplies were disrupted.
Medvedev said the Ukrainian economy could not afford to switch solely to Russian gas. The country currently buys a mixture of Russian and cheaper Central Asian gas.
"As soon as Ukraine stops buying Central Asian gas and switches to Russian gas, prices will rise by more than 30%. The Ukrainian economy cannot afford to pay such sums," he said.
Ukraine's first deputy premier, Oleksandr Turchinov, said earlier on Wednesday the gas price for Ukraine this year would remain at the 2007 level of $179 per 1,000 cu m, and that Ukraine would not raise its transit fee, which stands at $1.79 per 1,000 cu m per 100 km.
The current gas supply scheme between Russia and Ukraine includes RosUkrEnergo, a Swiss-registered trader half-owned by Gazprom, which has a monopoly on shipments to Ukraine. The firm sells gas to UkrGazEnergo, its joint venture with Ukrainian national energy company Naftogaz, which resells it to other traders.
On Wednesday, Ukraine's government ordered the liquidation of the monopoly importer.
Ukrainian Prime Minister Yulia Tymoshenko, the driving force behind the initiative to eliminate the intermediaries, earlier blamed both companies for allowing millions of dollars of debt to accrue in gas deals with Russia.
The deal on Tuesday was reached at talks between Ukrainian President Viktor Yushchenko and his Russian counterpart, Vladimir Putin.
