Price caps on Russian oil are set to be introduced as part of a global push to further sanction Russia's invasion into Ukraine.
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The Albanese government has revealed Australia will introduce a price cap on Russian oil imports following a coordinated move by the G7 to limit exposure and reliance on oil supplies from the Russian Federation.
Implementations of price caps have been adopted instead of an outright ban due to soaring inflation and cost pressures felt globally.
The issue of oil supply has particularly been felt within European economies which have a greater reliance on Russian oil and gas.
Foreign Affairs Minister Penny Wong said Australia would support further sanctions to limit Russia's assault on Ukraine.
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"Supporting the price cap demonstrates Australia's resolve to limit the global economic impact of Russia's invasion of Ukraine while maximising the pressure on Russia to end the conflict," Minister Wong said.
"Australia strongly supports Ukraine's sovereignty and territorial integrity, and we call on Russia to immediately withdraw its forces from Ukrainian territory.
"Australia condemns Russia's unilateral, illegal and immoral aggression against the people of Ukraine."
Full blown bans on Russian oil would likely further push up global oil prices.
Russia's invasion has spurred on significant price shocks within global commodity markets, most notably in oil and gas.
Russia accounts for between 8 to 10 per cent of all global oil supplies.
These shocks have fuelled a greater inflationary rise around the world which was already feeling pressure from ongoing supply constraints created by the COVID-19 pandemic.
European nations have started seeing double digit inflation numbers due to rising costs. Domestically annual inflation is sitting at 6.1 per cent to June quarter, but is forecast to peak in the December quarter at 7.75 per cent.
Treasurer Jim Chalmers noted rising commodity prices were driving up he cost of living, but flagged the new price cap was measured with the needs of sanctioning Russia over its aggression towards Ukraine.
"We recognise that rising energy prices are among the biggest concern for Australians already struggling to keep up with the skyrocketing cost of living," Dr Chalmers said.
"And we know that higher oil prices will likely drive higher inflation and risk slowing global economic growth.
"We're looking to limit some of the impacts of the war in Europe on the cost of living, by supporting this price cap."
The Coalition when in government introduced a temporary cut to the fuel excise to try and lower the cost at the bowser while prices ran high.
Labor has confirmed the excise cut would not be extended at the end of September.
Australia initially imposed sanction and a complete ban on the import of Russian oil.
This also included the purchasing and transporting of Russian oil, gas and refined products. Russian coal imports have also been banned.
There is also a concerted push by Australia and the G7 for other countries to adopt the price caps.
Australia has a limited exposure to Russian oil. The majority of refined oil for petrol consumption for Australian motorists comes out of Singapore.
