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The Impact of Fossil Fuel Market Fluctuations on the Japanese Electricity Market During the COVID-19 Era

Author

Listed:
  • Kentaka Aruga

    (Graduate School of Humanities and Social Sciences, Saitama University, Saitama 338-8570, Japan)

  • Md. Monirul Islam

    (Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh 2202, Bangladesh
    Commonwealth Scientific and Industrial Research Organisation—CSIRO, Waite Campus, Adelaide 5064, Australia)

  • Arifa Jannat

    (Institute of Agribusiness and Development Studies, Bangladesh Agricultural University, Mymensingh 2202, Bangladesh
    School of Agriculture, Food and Wine, University of Adelaide, Waite Campus, Adelaide 5064, Australia)

Abstract

The COVID-19 pandemic and the Russia–Ukraine war have struck the world’s energy markets. This study analyzed how the recent unstable fossil fuel markets impacted the Japanese electricity contracts, classified as extra-high-, high-, and low-voltage contracts. Multiple structural break tests were conducted to endogenously determine breaks affecting electricity prices during January 2019 to November 2022. By incorporating the effects of these breaks in the autoregressive distributed lag (ARDL) model, the study analyzed the effects of natural gas, coal, and crude oil prices on the types of electricity contract prices. The results of the analyses indicated a surge in electricity prices for low- and high-voltage contracts driven by an increase in natural gas. The results imply the importance of providing proper financial support to mitigate the effects of soaring electricity prices and implementing policies to diversify the electricity generation mix in Japan.

Suggested Citation

  • Kentaka Aruga & Md. Monirul Islam & Arifa Jannat, 2025. "The Impact of Fossil Fuel Market Fluctuations on the Japanese Electricity Market During the COVID-19 Era," Commodities, MDPI, vol. 4(2), pages 1-15, May.
    • Handle: RePEc:gam:jcommo:v:4:y:2025:i:2:p:6-:d:1656552
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