South African motorists could see some much-needed relief at the pumps in January, with early projections pointing to notable fuel price cuts after sharp increases in December, reports Cape {town} Etc.
According to projections from the Central Energy Fund, diesel prices are expected to drop by up to R1.02 per litre, while petrol could come down by around 15 to 17 cents per litre. Illuminating paraffin is also forecasted to decrease by approximately 69 cents per litre.
Final prices are expected to be confirmed ahead of their implementation on 7 January 2026.
The anticipated reductions are being driven by a combination of lower international oil prices, a stronger rand and a significant decline in the rand oil price, which has fallen to multi-year lows, according to Daily Investor.
The rand oil price is now at its lowest level since September 2021, supported by a weaker US dollar and expectations of a record oil production surplus in the new year, as per the publication, which noted that oil prices remain under heavy pressure with the International Energy Agency projecting subdued global demand alongside increased supply, particularly from the Organisation of Petroleum Exporting Countries (OPEC).
At the same time, the rand has shown resilience, strengthening by more than 9% against the dollar in 2025, buoyed by improving domestic economic fundamentals. These include faster-than-expected economic growth and stronger government finances, which have renewed investor confidence in South African assets.
The rand oil price is now 20% lower than a year ago, reported Daily Investor, a trend that could support sustained fuel price relief into 2026 and contribute to lower inflation – an important factor for the South African Reserve Bank (SARB) as it targets a 3% inflation midpoint.
However, the extent of relief at the pumps remains constrained by fuel taxes, which account for roughly a third of the retail fuel price. National treasury data shows that motorists currently pay R6.37 per litre in taxes on 93-octane petrol and R6.24 per litre on diesel. These include the General Fuel Levy, the Road Accident Fund levy, customs and excise duties, and carbon tax.
While lower oil prices and a firmer rand are creating favourable conditions for motorists, analysts caution that administered costs and taxes will continue to limit how much of the global price relief ultimately reaches consumers.
Compiled by Tauhira Ajam
First published on Cape {town} etc
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