South African motorists are set to enjoy a significant reduction in fuel prices in early January, following a combination of a stronger rand and easing global oil costs, according to data from the Central Energy Fund (CEF).
Petrol prices are expected to fall by US$2.76 to $3.06 per litre, while wholesale diesel will drop between US$7.45 and $8.17 per litre. Illuminating paraffin is also set to decrease by US$5.11 per litre. The official adjustments will take effect from the first Wednesday of 2026, 7 January, with the Department of Petroleum and Mineral Resources to confirm final figures in advance.
The reductions follow a week of strong “recoveries” market adjustments that determine the extent to which international fuel costs are passed on to local consumers. Analysts attribute the relief to a combination of currency strength and temporary global oil price moderation.
“The rand appears to be ending 2025 on the front foot. With the dollar still on the defensive and commodity prices rising, South Africa’s trade balance remains in surplus territory, justifying the currency’s impressive performance,” said ETM Analytics.
By the end of December, the rand traded at R16.65 to the US dollar, marking a gain of over 12 percent for the year. The local currency has been bolstered by higher gold and platinum prices – both key exports that have strengthened the trade balance and supported economic stability.
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Crude oil prices remain volatile on the international stage. Brent crude recovered above US$3.73 per litre (US$62 per barrel) ahead of Christmas, following geopolitical tensions. The United States imposed a partial naval blockade on Venezuelan crude shipments and carried out a military strike against Islamic State targets in northwest Nigeria. While these actions have provided short-term upward pressure, analysts warn that global oil markets remain oversupplied, with forecasts indicating a potential surplus in 2026.
Despite these fluctuations, the combination of a stronger rand and favorable commodity trends has allowed South African consumers to benefit from lower pump prices, offering relief after months of rising fuel costs. Petrol 93 is expected to fall by 46 cents per litre in local terms, equivalent to US$2.76, while petrol 95 will decrease by 51 cents, or US$3.06 per litre. Wholesale diesel 0.05% and 0.005% grades will see reductions of US$7.45 and US$8.17 per litre, respectively.
The year 2025 has seen a remarkable rally in South Africa’s precious metals, particularly gold and platinum, which reached record levels and provided strong support to the rand. Gold climbed above US$4,500 per ounce, marking the largest annual gain since 1979, driven by US Federal Reserve monetary easing, geopolitical uncertainty, strong central bank demand, and increasing ETF holdings. Silver also surged past US$75 per ounce, propelled by industrial demand and momentum-driven buying.
These developments have strengthened the rand, directly reducing the local currency cost of imported fuels and creating space for meaningful price adjustments.
The upcoming fuel price cuts are expected to ease household budgets and reduce operating costs for businesses, particularly transport and logistics sectors, which were burdened by rising energy costs throughout the year. Analysts warn, however, that ongoing global uncertainty – including potential geopolitical flare-ups and supply disruptions – could create volatility in 2026, making sustained affordability dependent on continued currency strength and stable commodity markets.
With households and businesses bracing for the first pump price relief of the year, South Africa enters 2026 with cautious optimism, balancing a strong export-driven rand, easing inflationary pressures, and the continued challenge of managing international energy market risks.
