Price Dynamics of Fossil Fuel Commodities in the Period 2014 - 2024

Abstract

Over the last decade, the dependence on fossil fuels and their prices has been increasingly discussed. This paper aimed to assess the development of fossil fuel prices and their relationship to GDP in the Czech Republic. To achieve this objective, a VAR model and Granger causality test were used. All fossil fuel prices peaked in 2022. The causal relationship with GDP in the Czech Republic was confirmed for natural gas and coal prices. On the other hand, the causal relationship between oil and GDP in the Czech Republic was not confirmed during the period under study. Weak correlations were found with the Covid-19 pandemic, inflation, and unemployment in the EU. The only exception is the correlation between coal and inflation in the EU, which was moderately strong. A limitation of the paper is the length of the period studied, with data collection taking place only once a month.