South African motorists could be starting 2026 with real relief at the pumps, as early fuel price indicators point to a petrol and diesel price cut in January — a rare piece of good news after months of volatility.
The Department of Mineral Resources and Energy (DMRE) is expected to announce new fuel prices that will take effect on Wednesday, January 7, 2026, and current data suggests the adjustment could favour both petrol and diesel users.
According to the Central Energy Fund (CEF), which monitors daily fuel price movements and under-recoveries, all major fuel types are currently showing pricing relief, provided current market trends hold.
This marks a clear shift from the December 2025 fuel price increase, when motorists absorbed hikes of up to 82 cents per litre.
January 2026 fuel price forecast: early signs of relief
Based on mid-December data from the Central Energy Fund, early projections for January 2026 fuel prices in South Africa point to meaningful decreases:
- Petrol 93 price forecast: decrease of 10–15 cents per litre
- Petrol 95 price forecast: decrease of 12–17 cents per litre
- Diesel price forecast (0.05%): decrease of 88–102 cents per litre
- Diesel price forecast (0.005%): decrease of 95–102 cents per litre
- Illuminating paraffin price forecast: decrease of 63–69 cents per litre
While these figures remain indicative, they represent a sharp turnaround from earlier expectations — and follow the November 2025 petrol price drop, which delivered the biggest fuel relief of the year.
Diesel price cut could reach nearly R1 per litre
Diesel users were hit hardest in the most recent fuel adjustment, with prices climbing by 65 to 82 cents per litre, while petrol rose by 29 cents.
If current trends persist, diesel prices in January 2026 could fall by close to R1 per litre, offering major relief to:
- Commuters
- Transport and logistics operators
- Farmers and small businesses
- Public transport users
For many households, this could be the most meaningful diesel price relief since 2021.
Why fuel prices are finally falling
South Africa’s fuel prices are driven by two dominant global and domestic factors:
- International oil prices
- The rand–US dollar exchange rate
Both are currently moving in South Africa’s favour.
Brent crude oil is trading near $59.97 per barrel, while the rand has strengthened to about R16.79 to the dollar — levels last associated with optimism during the September 2025 fuel price outlook.
The rand oil price is now at its lowest level since September 2021, with the International Energy Agency projecting a record oil production surplus in 2026.
Chief investment strategist at Old Mutual’s Symmetry, Izak Odendaal, noted that the rand oil price is 20% lower than it was a year ago, creating the conditions for sustained fuel price relief.
The rand has strengthened by over 9% against the dollar in 2025, supported by improving government finances and stronger-than-expected economic growth.
Why cheaper fuel matters for inflation and interest rates
Lower fuel prices don’t just ease transport costs — they ripple through the entire economy.
Fuel relief supports lower inflation, which is critical for the Reserve Bank’s 3% inflation target and helped pave the way for the recent repo rate cut to 7.25%, easing pressure on homeowners and consumers. (Read NOWinSA’s coverage of the recent repo rate cut to 7.25% here).
It also coincides with improving economic stability, including the averted automotive sector strike after NUMSA and automakers agreed to a three-year wage deal, removing a major risk to growth and jobs.
Fuel taxes still limit the full benefit
Despite the improving outlook, fuel prices in South Africa remain heavily taxed.
Around one-third of the fuel price at the pump consists of government levies, including the General Fuel Levy (GFL) and Road Accident Fund (RAF) levy.
In 2025, motorists paid approximately:
- R6.37 per litre in fuel taxes for petrol
- R6.24 per litre for diesel
These taxes reduce how much of the global oil price relief reaches consumers — even in favourable conditions.
A hopeful start to 2026 for South African motorists
Even with those constraints, January 2026 is shaping up as the most hopeful fuel price reset in years.
With oil prices falling, the rand holding firm, inflation easing and diesel relief finally in sight, South Africans may be entering the new year with something increasingly rare: confidence at the fuel pump.
For official data and daily tracking, motorists can follow updates from the Central Energy Fund.
