The German anti-trust watchdog has agreed to drop an investigation into how utilities set gas prices in return for concessions by RWE and other utilities
Germany's anti-trust watchdog has agreed to drop an investigation into how utilities set gas prices in return for concessions by RWE and other utilities, sources familiar with the situation said on Thursday.
The sources said RWE would announce price cuts as of the start of 2009 as a result of the agreement. Other utilities would offer customers vouchers.
Industry sources said the RWE price cuts may be below 10 percent. Spokespersons for RWE declined to comment.
The cartel authority already won price concessions from E.ON group subsidiaries last month in the probe, which involves a total of 35 companies which it suspected of overcharging, and also includes subsidiaries of Vattenfall and Gaz de France GDF.PA.
The probe was launched in the spring when gas prices had been rising sharply for three years, affecting consumers and contributing to inflation.
Cartel laws were tightened this year, forcing energy companies suspected of profiteering to disclose parts of their calculations on pricing, passing the burden of proof from regulators on to utilities.
The German cartel office said in a statement on Thursday it will hold a press conference on the issue on Dec. 1. No further details will be available until then, it said.
Independently of the row, German gas companies earlier this week began announcing a wave of price-cuts for early 2009, as the main reason for the earlier hikes - rocketing crude oil prices - has now evaporated.
Gas in continental European supply contracts is index-linked to those of oil with a time lag of around six months. The adjustments are made on a quarterly basis.
Oil has now shed two thirds of its summer peak prices of $147 a barrel and is currently trading at around $53.
Because the trickle-down effect of changing wholesale energy prices down to retail consumers is taking even longer than six months, many gas suppliers will still carry out planned gas price hikes in December before implementing the cuts.