South African motorists may soon see petrol prices dip below R20 a litre for the first time in four years, provided global oil prices do not surge sharply and the rand avoids a significant decline against the US dollar in the coming weeks.

Fuel costs are already at their lowest levels since February 2022, helped by an international glut of crude oil and a weaker US dollar. According to the latest figures from the Central Energy Fund (CEF), all grades of petrol and diesel are currently showing over-recoveries for the ongoing review period that will inform fuel prices for February 2026.

An over-recovery occurs when fuel prices are set higher than actual costs, resulting in downward adjustments, while under-recoveries lead to increases.

As of 13 January 2026, unleaded 95 petrol recorded an over-recovery of about 90 cents per litre, with unleaded 93 showing roughly 85 cents. If these margins hold, inland prices would drop to R19.85 for unleaded 95 and R19.79 for unleaded 93, while coastal unleaded 95 could fall to around R19.02 per litre.

Diesel is showing even larger potential reductions. The wholesale price of 50ppm diesel reflects an over-recovery of about R1.20 per litre. Should this persist through the review period, wholesale diesel prices would fall to roughly R17.33 inland and R16.67 at the coast. Retail diesel prices may vary, although filling stations often adjust prices to stay competitive.

The main driver behind the expected decreases is the lower average international oil price compared with the previous review period. Brent crude traded at around $55 a barrel in early January but climbed above $61 in the past week.

This rebound has been linked to rising geopolitical tensions between the United States and Iran, a major global oil producer. Ongoing unrest in Iran and US threats to impose a 25% tariff on countries trading with Tehran have raised concerns about potential supply disruptions. There are also fears that Iran could interfere with shipping through the Strait of Hormuz, a critical global oil route.

These developments have already reduced earlier expectations of over-recoveries of R1.20 per litre for petrol and R1.75 for diesel during the February pricing review period.

Some of the upward pressure from oil prices has been cushioned by movements in the exchange rate. Since oil and refined fuel products are priced in US dollars, shifts in the dollar–rand rate play a major role in South Africa’s fuel costs. The exchange rate used in the basic fuel price improved from above R17 to the dollar at the end of December 2025 to below R16.50 by mid-January 2026.

This change reflects weakness in the US currency rather than a strong rand, driven by expectations of interest rate cuts by the US Federal Reserve, lower bond yields, slow economic growth, and ongoing trade tensions.

Expected fuel price adjustments for February 2026 (as at 13 January 2026):

• Inland
  • Unleaded 95 petrol: down 90c to about R19.85
  • Unleaded 93 petrol: down 85c to about R19.79
  • 50ppm diesel (wholesale): down R1.20 to about R17.32
  • 500ppm diesel (wholesale): down R1.09 to about R17.32
• Coastal
  • Unleaded 95 petrol (retail): down 90c to about R19.02
  • Unleaded 93 petrol (retail): down 85c to about R19.00
  • 50ppm diesel (wholesale): down R1.20 to about R16.56
  • 500ppm diesel (wholesale): down R1.09 to about R16.49

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