Germany's E.ON sues Gazprom over gas prices

Germany's E.ON, one of Gazprom's major consumers in Europe, has filed a suit against the Russian gas giant calling for it to revise its pricing formula, Kommersant business daily said on Tuesday, quoting Gazprom Export, Gazprom's export arm. Gazprom favors long-term deals where the price is set under a take-or-pay principle, while consumers say long-term contracts are more expensive than purchases on the spot market. Italy's Edison had recently forced Gazprom to cut the price of gas by 200 million euros following court proceedings. Kommersant sources said E.ON's contract was revised by introducing a spot component into the pricing formula last January, but the German company, which consumes almost half of Gazprom's exports to Germany, its largest market in Europe, asked for a new revision a month later. The sources declined to say what changes E.ON wanted to introduce into the contract, but a source said that E.ON's sales resulted in low margins as the company sold a lot of gas on the spot market.