Fantastic news about petrol prices in South Africa next week
A sharp rise in global oil prices has been offset by a rand rally, keeping South African motorists on track for a sizeable cut in petrol and diesel prices next week.
Month-end data from the Central Energy Fund (CEF) shows that fuel price recoveries have maintained their positive momentum, all but guaranteeing a price cut in February.
At the end of the month, petrol prices showed a solid over-recovery of around 65 cents per litre, while diesel prices had a similar over-recovery between 50 and 56 cents per litre.
While the over-recoveries are weaker than they were at mid-month—and even lower than at the start of the month—motorists are still in line for a second month of relief at the pumps.
These are the projected levels at the end of January:
- Petrol 93: decrease of 65 cents per litre
- Petrol 95: decrease of 64 cents per litre
- Diesel 0.05% (wholesale): decrease of 50 cents per litre
- Diesel 0.005% (wholesale): decrease of 56 cents per litre
- Illuminating paraffin: decrease of 53 cents per litre
Both the global oil price and rand/dollar exchange are contributing to over-recoveries in local fuel.
However, the rising oil price over the month has dropped its over-recovery from about R1 per litre to just 25 cents per litre by the end of week four.
Oil prices started the year under pressure due to the United States’ attack on Venezuela in which it captured the country’s former president, Nicolás Maduro.
While operating under the pretence of taking on the drug trade, oil has emerged as the key reason for the United States’ action, with the White House moving to secure favourable oil stocks.
With an influx of Venezuelan oil, prices came under pressure heading below $58 a barrel early in the month.
In recent weeks, though, oil prices have moved in the opposite direction, now trading over $68 a barrel as the Trump administration focuses on Iran.
The US president’s messaging has shifted from punishing Tehran for its deadly crackdown on protesters to extracting a new nuclear agreement from the country.
Emphasising the focus and adding weight to his threats, Trump ordered naval assets to the region, with an aircraft-carrier strike group recently arriving in the Middle East.
Bloomberg analysts noted that markets are concerned that fallout from an escalation in tensions could impact shipping through the Strait of Hormuz, a narrow passage separating Iran and the Arabian Peninsula.
Tankers carrying crude and liquefied natural gas transit through the strait daily to deliver cargoes worldwide.
While these new threats have led to higher oil prices, the climb has been undercut by rising supplies and the continued expectation of a 2026 glut. This has kept prices muted, especially relative to 2025.
The rand is the MVP
Running counter to higher oil prices, the rand/dollar exchange rate has been the balancing factor, pushing fuel price recoveries ever higher in January.
Despite pulling back from levels under R15.70 to the dollar earlier in the week, the rand continues to trade in its “fair value” range.
In terms of purchasing power parity and accounting for local economic factors, various models put the rand’s fair value between R13 and R16 per dollar.
The local unit broke through the R16/$ resistance level earlier in the week, bolstered by a weakening dollar, a rush into commodities, and positive signals in the local economy.
Record gold and platinum prices, heightened US policy uncertainty, and growing expectations of further US Federal Reserve rate cuts weighed on the dollar.
The Trump administration’s erratic policy moves, attacks on allies, threats to the independence of the Federal Reserve, and concerns around the US president’s mental health have rattled markets.
In addition to these misgivings, civil unrest, sparked by two highly publicised fatal shootings by US federal agents, has added to perceptions of policy unpredictability and brought threats of another government shutdown.
As these played out in markets, investors fled to safe-haven assets like gold. Elevated gold and platinum exports materially improved South Africa’s terms of trade, boosting the rand.
However, just as the rand benefits from a weaker dollar, it also suffers when the greenback recovers. On Friday (30 January), the rand lost 1% against the dollar, trading at R15.91/$, as the latter strengthened.
The dollar was up 0.4% against a basket of currencies, while gold slumped by more than 4% on rumours that the Federal Reserve could get a more hawkish-than-expected chair.
The dollar also received a lift after Republican and Democratic lawmakers hammered out a deal to stave off a looming government shutdown.
Nevertheless, the late-week turn hasn’t reversed the rand’s gains, with the currency still sitting in a fair-value range and contributing around 30 cents per litre to an over-recovery in fuel prices.
The Department of Petroleum and Mineral Resources will announce the official petrol price changes in the coming days, for implementation on Wednesday, 4 February 2026.
Loading ...