G7 & Australia agree on price cap for petroleum products from Russia

The Price Cap Coalition of the G7, the European Union and Australia have set caps on the price of seaborne Russian oil products, effective from February 5, 2023, Report informs referring to the UK government website.

High-value Russian exports such as diesel and gasoline, will be capped at $100 while lower-value products such as fuel oil will be capped at $45.

The UK and its coalition partners will only provide services facilitating the maritime transport of refined oil products originating in Russia if the goods are traded at or below the cap levels of $100 for high-value products like diesel and $45 for low-value products like fuel oil. These prices will be kept under review.

This follows the $60 price cap on Russian crude oil that came into force on 5 December last year. Initial signs suggest that the crude oil cap is successfully curtailing Putin’s ability to use revenues from oil sales to finance his illegal war while minimizing disruption to global supply. Russia’s flagship crude oil is now selling around $40 lower than global benchmarks.

The UK government has already introduced an import ban on Russian oil products; therefore, the caps will not be used by the UK.

To implement the price caps, the government has laid domestic legislation and published UK guidance to help industry prepare for and implement the requirements of each cap.