DIESEL PRICE DYNAMICS AMID THE RUSSIAN FOSSIL FUEL CRISIS: INSIGHTS FROM SLOVAKIA

Abstract

The Russian fossil fuel crisis has precipitated significant disruptions in global energy markets, amplifying concerns about energy security and inflationary pressures, particularly in countries heavily reliant on Russian energy imports like Slovakia. This paper aims to analyse the dynamics of diesel prices and their impact on inflation in Slovakia against the background of the Russian fossil fuel crisis. To achieve the paper's aim, the paper mainly focuses on the causal relationships and the extent of the impact of diesel prices on inflation in 2020-2023. In addition to analysis, synthesis and generalisation, advanced econometric techniques are used. The findings indicate a strong correlation between diesel prices and inflation, with approximately 70.4% of the variability in the inflation rate explained by changes in diesel prices. This research provides valuable insights for policymakers, highlighting the importance of energy diversification, enhancing energy security, and implementing targeted subsidies to mitigate the adverse effects of diesel price volatility on inflation. The paper underscores the critical need for comprehensive strategies to manage economic stability in the face of geopolitical tensions and energy market disruptions.