Big petrol price cuts coming next week
Month-end data from the Central Energy Fund (CEF) indicates that substantial price cuts for petrol and diesel are all but confirmed for January 2026, with the changes expected to take effect next week.
The data shows petrol prices with an over-recovery of between 59 and 63 cents per litre, while diesel prices should decrease by between R1.35 and R1.47 per litre.
The over-recoveries are being driven by both a stronger rand and stable oil prices relative to November.
Petrol price adjustments take effect on the first Wednesday of each new month, which in January is next Wednesday, the 7th.
The Department of Petroleum and Mineral Resources is expected to announce the official adjustments sometime before then, likely in the new week.
These are the expected price changes at the end of week 4:
- Petrol 93: decrease of 59 cents per litre
- Petrol 95: decrease of 64 cents per litre
- Diesel 0.05% (wholesale): decrease of 135 cents per litre
- Diesel 0.005% (wholesale): decrease of 147 cents per litre
- Illuminating paraffin: decrease of 108 cents per litre
The shift in global oil prices has been the most significant contributor to the over-recovery, accounting for around 40 cents per litre for petrol prices and R1.20 per litre for diesel prices.
However, the rand has also contributed in a big way, with its strengthening over December adding another 20 cents per litre to the expected cut.
The rand has had a strong year against the US dollar, gaining around 13% against the greenback. This is thanks to a combination of factors, both local and international.
Locally, market sentiment improved dramatically with a credible mid-term budget, a credit rating upgrade, a stable Government of National Unity, and South Africa being removed from the FATF grey list.
Globally, the rand’s rally was aided by a depreciating dollar and a commodity boom.
This allowed the rand to break under R17.00/$, stabilising around R16.60/$ over December during thin holiday trade. On Friday, the rand was at R16.53 against the dollar, marking another positive move.
Analysts anticipate the rand’s rally to continue in 2026 as local reforms progress and South Africa’s economy stabilises on an upward trajectory.
Oil prices are another story
Like the rand, oil prices in 2025 generally worked in motorists’ favour, losing about 20% during the course of the year.
Pricing proved to be relatively volatile, fluctuating widely – from below $58 a barrel to over $68 a barrel at times.
The main theme for the year was oversupply, with the United States’ tariff and trade wars dousing demand while oil producers ramped up production. This theme is expected to continue in 2026.
Brent crude ended the year trading above $61 a barrel, paring losses made immediately before the New Year break.
Prices edged higher on the first trading day of 2026 after capping their biggest annual drop since 2020.
According to Bloomberg analysis, traders are currently weighing an upcoming OPEC+ meeting and geopolitical concerns in Venezuela, Ukraine and Iran.
On the geopolitical front, US President Donald Trump’s administration stepped up a campaign against Venezuela’s oil exports by sanctioning companies in Hong Kong and mainland China, along with vessels accused of evading curbs.
Following a significant military build-up in the region, the US has imposed a partial blockade on oil vessels calling at Venezuela, and also struck an alleged drug-related facility inside the country.
Meanwhile, Russia and Ukraine struck each other’s Black Sea ports over the new year period, damaging infrastructure, including a refinery.
Crude oil prices retreated by about a fifth last year amid mounting concerns about a global glut, following an earlier round of supply hikes from OPEC+ and rising output from rival drillers.
The International Energy Agency has forecast a glut of about 3.8 million barrels a day for this year.
“Geopolitical events will support crude prices in the short term,” said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp.
Still, lower prices are expected over the first quarter due to concerns about oversupply and potential progress toward a peace deal in Ukraine, he said.
Loading ...