KIEV, Oct. 25 - Prime Minister Mykola Azarov said Tuesday it may take one month for his government to negotiate a new natural gas agreement with Russia that calls for lower gas prices.

The new time estimate is more cautious and comes less than a week after Azarov had said such deal may be reached within days and definitely before October 27.

“We count on having the agreement with Russia literally within a month,” Azarov said in televised remarks while touring the Dnipropetrovsk region.

Ukraine has been unsuccessfully trying to re-negotiate the 10-year natural gas agreement with Russia for the past 18-months.

The agreement was originally negotiated by then-Prime Minister Yulia Tymoshenko and her Russian counterpart Vladimir Putin in January 2009.

Azarov, who replaced Tymoshenko in March 2010, said the agreement was “extremely unfavorable” and “enslaving” by setting gas prices at levels higher than for most other countries in Europe.

Ukraine has been seeking to re-negotiate the agreement amid concerns the formula that figures out gas prices has been relying heavily on crude oil.

The price of gas that Ukraine has to pay Russia’s Gazprom is expected to increase to about $400.5 per 1,000 cu m in the Q4, compared with $355/1,000 cu m in Q3, $297/1,000 cu m in Q2 and $263/1,000 cu m in Q1.

Azarov has repeatedly said a fair price for Ukraine - which is situated closer to the Russian border and buys more gas than any other European country – must be just above $200/1,000 cu m.

For Ukraine it is crucial to have the agreement with Russia on lowering gas prices in order to be able to qualify for resumption of $15.2 billion loan from the International Monetary Fund.

The IMF has demanded the Ukrainian government to dramatically increase gas prices for households, a measure that would be highly unpopular ahead of the October 2012 general elections.

The government has focused on trying to negotiate lower gas prices in talks with Russia in order to keep the gas household prices unchanged.

“What the IMF has been demanding? It says we have to hike gas tariffs for the people,” Azarov said on Tuesday. “But the people do not agree with this, so we are going to tell the IMF that we are implementing all measures they as creditors have requested, but there are the limits.”

“Why do you demand to hike gas prices if we are projecting completely different gas prices?” Azarov argued suggesting the gas talks with Russia have been making progress.

Ukraine and Russia first reported breakthrough in the gas talks after a meeting between President Viktor Yanukovych and Russian President Dmitry Medvedev in Zavidovo near Moscow on September 24.

Yanukovych was supposed to suggest creating a trilateral joint venture to operate Ukraine’s massive natural gas pipeline system. The JV would include entities from Russia, Ukraine and the European Union, according to a person at the Yanukovych administration familiar with the situation.

But Russia has been seeking to create a bilateral joint venture, involving Ukraine and Russia, according to a source at Russian gas company Gazprom.

Yanukovych and Medvedev again met on October 18 in Donetsk, Ukraine, after which Yanukovych had said the agreement may be announced “very soon.” (sb/ez)