E.ON set to receive Gazprom gas price cut

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E.ON - one of the big six energy companies - is set to receive a gas price cut from natural gas exporter, Gazprom, according to an article published by Bloomberg Businessweek.

The price cut is set to be "conceptually the same" as the one Wingas - a joint venture between Wintersall and Gazprom - received last year according to Alexander Medvedev, Gazprom's deputy chief executive officer.

Representing Gazprom's biggest market by revenue, its European-based customers have sought purchasing contract changes following the 2008 recession; the recession led to a fuel surplus - which dragged spot prices below the contracts.

The contracts are tied to crude and refined-oil product prices but also feature a time lag - which can be as long as nine months.

Commenting on the price cut, Mr Medvedev added: "The price correction will help us sell gas in a competitive way.

"Volumes won't be released," he added.

It was also revealed that Gazprom would not be increasing the weight of spot pricing in its formula.

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