Australian Prime Minister Anthony Albanese (Photo: Andre Malerba/Bloomberg)

Had the Australian government not imposed a domestic price cap on gas and coal, Australians could have faced up to a 36 percent increase in gas prices in 2023, Energy Minister Chris Bowen said on Saturday.

Amid the deteriorating global energy crisis, the government has taken the extraordinary step of capping gas and coal prices, at 12 Australian dollars ($8.1) per gigajoule and 125 Australian dollars ($84,9) per tonne, for one year under the country's Energy Price Relief Plan, Australian Prime Minister Anthony Albanese said on Friday.

“We were facing price rises next year of 36 percent, that's the latest figures, that's not acceptable, either you intervene and you take the sting out of those price rises or you don't,” The ABC quoted Albanese as saying.

The new measures would not be a "magic bullet," he said, but domestic price caps are now the most effective lever the Australian government can use to keep prices from skyrocketing.

“We are certainly not saying this is a magic bullet and we'll see energy prices fall. What we are suggesting is that this takes the big impact of the increases out of the system,” Albanese added.

Last week, the G7 nations and Australia issued a statement saying that had come to an agreement on the maximum price cap of Russian crude oil: $60 per barrel, a decision which will come into effect on December 5.

The price cap developed by the US-led international coalition will be implemented on February 5, 2023, and includes a price review mechanism that will keep the price cap at 5% below the market value.

Alexander Novak, the deputy prime minister of Russia, issued a warning earlier this week that the price cap on Russian oil will only result in a decline in international investments in the sector, which will then cause prices to rise.

The introduction of a price cap on Russian oil would lead to an explosive hike in fuel prices around the world, according to Ivan Abramov, first deputy chairman of the Russian Federation Council Committee on Economic Policy, speaking to Sputnik.

The price cap on Russian oil proposed by the West corresponds to the current oil prices, and it does not affect Russia, Russian President Vladimir Putin said on Friday.

Additionally, the Russian leader stressed that the authorities in Moscow would take specific steps to allow the country to respond to the oil price cap and that the steps in question would be outlined in a decree that will be coming out in the coming days.

Since 2021, and after the start of the war in Ukraine, global energy prices have been rising, and the West adopted sanctions packages against Moscow. This has placed energy security high on both the global and national agendas and pushed many countries to resort to contingency measures.