Motorists in South Africa can look forward to a reduction in the price of both petrol and diesel this January.
This is according to the latest mid-month data published by the Central Energy Fund (CEF), which indicates an improvement in the cost of both types of fuel.
The positive development is mainly attributed to the strengthening US dollar/rand exchange rate and the international oil price.
Oil prices have dropped significantly over the past month, thanks to an increase in supply from major oil producing nations.
Over the same period, the rand maintained a strong value against the dollar, supported by high gold prices.
As a result, the CEF estimates that the following fuel price adjustments will take effect in January 2026:
- Petrol 93 – Decrease of 15 cents per litre
- Petrol 95 – Decrease of 17 cents per litre
- Diesel 0.05% (wholesale) – Decrease of 94 cents per litre
- Diesel 0.005% (wholesale) – Decrease of 102 cents per litre
Note that these are the final price adjustments that will be implemented by the Department of Petroleum and Mineral Resources, which are still subject to change and will only be announced a few days before the official implementation date on the first Wednesday of the month.
A good start to 2026
The CEF’s latest predictions are better than the ones it reported earlier this month, which indicated that petrol would receive a small bump in price.
Diesel was also expected to see a small price cut of around 70c per litre.
However, the adjustments have improved thanks to the rand’s stronger value, trading at roughly R16.80 per dollar.
Gold held near a more than seven-week high on Monday on a weaker dollar and lower US yields. As a major producer of precious metals, South Africa often benefits from firmer bullion prices, reported BusinessTech.
“Through the past week, the rand was able to capitalise on weaker USD sentiment. As the USD remained in a weaker trend, the rand was able to sustain the break below 16.90/$ and open the door for even more appreciation,” ETM Analytics said in a research note.
“Technically speaking, the rand could now test levels in the 16.60s before the end of the year, which would play a significant role in reinforcing the virtuous cycle that has resulted in the rand appreciating as much as it has this year,” ETM Analytics said.
Another positive development is the increased global oil supply – the result of the Organisation of the Petroleum Exporting Countries (OPEC+) nations increasing their output.
The International Energy Agency has indicated that the surplus next year is likely to be the largest on record.
Brent crude oil prices dropped below $60 per barrel for the first time since May, which is partially due to lower demand amidst efforts to end the war in Ukraine.
Loading ...
