Petrol price reality check for South African motorists
South African motorists are currently benefiting from a combination of lower global oil prices and a stronger rand.
However, experts warn that this relatively favourable fuel price environment may not last indefinitely.
South Africa has experienced a notable decline in petrol prices at the start of 2026, and another big decrease is forecasted for February.
Early data from the Central Energy Fund (CEF) points to large recoveries for both petrol and diesel, helped by the stronger rand and pressure on global oil prices.
Petrol prices are showing an over-recovery of around R1.20 per litre, while diesel has an even larger recovery of around R1.75 per litre.
Energy expert Roland Tatnall explained that petrol prices are mainly driven by two factors: the international price of crude oil and the rand–dollar exchange rate.
At present, both are working in South Africa’s favour. Crude prices have fallen sharply over the past year, while the rand has firmed against the dollar.
Tatnall noted that crude oil prices have been decreasing, adding that Brent crude is currently trading at around $60 a barrel, down from about $80 a barrel at the start of 2025.
“It has decreased quite significantly over the last few months. This drop in oil prices has fed directly into lower pump prices locally,” he said.
At the same time, the dollar has softened, and the rand has firmed against the dollar, amplifying the relief for consumers.
As long as these two factors remain aligned, Tatnall believes fuel prices should remain broadly stable.
However, he stressed that this balance is fragile. “If either one of them moves, then obviously prices will change.”
One of the key risks is currency volatility. Tatnall pointed out that the rand’s quite volatile, so we don’t know where that’s going to go in the near term.
Even if oil prices remain subdued, a weaker rand could quickly push fuel prices higher. Conversely, while crude prices are currently low, he questioned how sustainable this level really is.
“The $56 to $60 a barrel is quite low, and there are questions on how sustainable that is,” he said.
A fragile balance
Tatnall also highlighted political pressure in the US to keep oil prices down. He noted that US President Donald Trump has repeatedly spoken about wanting oil prices closer to $50 a barrel.
While that could be positive for South African motorists, Tatnall doubts it is realistic. “That’s really biting off the hand that feeds him,” he said.
He explained that much of US shale oil production becomes uneconomical at those levels.
“Onshore shale oil has a break-even price for new wells of between $60 and $65 a barrel, so pushing the price much lower doesn’t make a lot of sense.”
Beyond short-term pricing, Tatnall noted that global oil demand dynamics are also shifting, particularly due to the rise of electric vehicles.
“It has already had an impact,” he said, pointing to China, where electrification has removed a million barrels of oil a day from Chinese demand.
He added that in countries like Norway, around 95% of new cars sold are electric vehicles. However, Tatnall does not expect this shift to dramatically reduce oil demand in the near term.
“The oil industry is not going anywhere soon,” he said. While EV adoption is growing, he argued that oil consumption of roughly 100 million barrels per day is unlikely to fall drastically over the next few years.
Tatnall emphasised that while current prices are lower than they have been in a long time, motorists should not assume this is the new normal. “If either the rand or the oil price moves, prices will change.”
Fuel prices may remain relatively steady if current conditions persist, but South Africans should be prepared for potential volatility.
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