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Reserve Bank of Australia Governor, Philip Lowe on Wednesday said the central bank would consider increasing Australia's interest rate this year, citing uncertainty in rising inflation and commodity prices.

Speaking in Sydney, Lowe added that given Australia's 3.5 per cent rate of inflation, "it is plausible that the cash rate will be increased later this year."

"I recognise that there is a risk to waiting too long, especially in a world with overlapping supply shocks and a high headline inflation rate. But there is also a risk of moving too early," he said.

A number of major private Australian banks, including the Commonwealth Bank of Australia, have forecast that interest rates would see their first rise by the middle of the year, Xinhua news agency reported.

Meanwhile, Reserve Bank of Australia Governor touted optimism that surging commodity prices would benefit Australia.

However, the price of oil has surged by 40 per cent since the start of February.

"Australia is in a different position because we export many of the commodities whose prices are rising," Lowe added. He said despite profits for Australia's commodity producers, rising petrol costs would impact everyday Australians.

"This (rising fuel prices) will eat into household budgets, push up costs for many businesses and crimp spending in some areas."

Liam Wagner, Associate Professor in energy from the University of Adelaide, told Xinhua that crude oil would likely have much further reaching impacts on Australia's economy.

"The diesel price is going to go up quite significantly, and as a consequence the price of all food is going to go up."

He added that rising commodity prices would likely constrain Australia's post-Covid economic growth.

"With this shock of oil prices going up so high, and so quickly, we'll start to see they're having an effect on the economy quite significantly."