Big petrol price relief on the cards for South Africa

South African motorists are set for more petrol and diesel price cuts at the pumps in February, as a strengthening rand offsets a rise in oil prices. 

Furthermore, despite several geopolitical shocks involving oil-producing countries, such as Venezuela and Iran, a substantial production surplus is still projected for 2026. 

This is expected to result in sustained downward pressure on oil prices throughout the year, unless significant supply disruptions occur. 

South Africa’s Central Energy Fund tracks the fluctuations in international oil prices and the rand-dollar exchange rate to forecast changes in the price of fuel at the pumps. 

Its latest data indicates the following changes for February in South Africa –

• Petrol 93 – decrease of 96 cents per litre
• Petrol 95 – decrease of 97 cents per litre
• Diesel 0.05% – decrease of 120 cents per litre
• Diesel 0.005% – decrease of 132 cents per litre

These expected reductions will add to the relief South African motorists are already feeling, with petrol prices over R1.50 per litre lower than they were a year ago. 

This is also expected to ease upward pressure on inflation, aiding the Reserve Bank’s efforts to maintain price increases at its new 3% target and enabling it to cut interest rates further. 

The expected decline in petrol and diesel prices will only occur if the current status quo holds, with substantial changes possible before the Department of Mineral and Petroleum Resources announces the official prices at the end of the month. 

The International Energy Agency still forecasts a record oil surplus in 2026, with increased supply coming from members of the Organisation for Petroleum Exporting Countries (OPEC). 

OPEC lifted its production caps on members in 2025 to ensure they maintain market share, despite oil’s steady decline throughout the year. 

Despite this record surplus, geopolitical shocks are still set to play a major role in determining the price of oil. In particular, events in Venezuela and Iran will take centre stage. 

On Monday, 12 January 2026, oil prices reached their highest level since November 2025 after US President Trump said he would impose a 25% tariff on goods from countries doing business with Iran. 

This will have a significant impact on oil supply, despite many countries reducing their reliance on Iranian oil. 

China and India still remain major consumers of oil from the Middle Eastern country. These tariffs may force two of the largest oil importers to find suppliers elsewhere, putting pressure on the market.

Furthermore, Iran, if threatened, may decide to block the Strait of Hormuz, through which millions of barrels of oil flow every day from the Persian Gulf. 

The rand’s strength is limiting much of the impact on petrol prices from the rise of oil prices, with the currency continuing to gain ground against the US dollar. 

The rand has appreciated significantly on the back of rising commodity prices and dollar weakness, making it relatively cheaper to import goods into South Africa. 

Importantly for South Africa, it appears as though this rally still has some legs, with commodity prices rising by 2.3% month-on-month in December and by 5.5% year-on-year.

This was largely driven by a rise in precious metals prices, which rose by 6.4% month-on-month and by 26.7% annually in December. 

Investec chief economist Annabel Bishop noted that this was coupled with a rise in the prices of industrial commodities, both of which are positive for the rand.

Surging commodity prices have been coupled with some improvement in local economic fundamentals, with the country receiving its first credit ratings upgrade in over a decade in 2025.