If you’ve pulled into a Sasol or Engen lately, you might’ve done a double-take at the numbers on the screen. For the first time in what feels like forever, the news isn't about another soul-crushing hike. Actually, we’ve kicked off 2026 with some of the lowest fuel costs we’ve seen in nearly four years.
It’s about time.
Honestly, the last few years were a nightmare for anyone with a commute. We saw 95 unleaded hit crazy highs above R26 back in 2022, and the "new normal" seemed to settle somewhere in the uncomfortable R21 to R23 range. But as of January 7, 2026, the price for a litre of 95 petrol inland dropped to R20.75. Down at the coast, it’s even better, sitting at R19.92.
The Weird Reason Petroleum Prices in South Africa are Dropping
You’d think a massive price drop would be due to some genius local policy. Not really. It’s mostly because the rest of the world has a "problem" we happen to love: too much oil.
OPEC+ and a bunch of non-OPEC countries have been pumping out crude like there’s no tomorrow. Because there is an oversupply, the price of Brent Crude has been hovering around the $61 mark, down from much higher peaks. There was even a moment where it dipped under $58 earlier this month.
Then you’ve got the Rand.
Our currency is famously "moody," but it’s been on a bit of a winning streak lately. It ended 2025 about 13% stronger against the US Dollar. That’s its best run in sixteen years. Since we buy oil in Dollars, a stronger Rand means we get more "bang for our buck" when the tankers arrive at our ports. Between December and January, the Rand appreciated from about R17.22 to R16.85 per Dollar. That movement alone shaved over 20 cents off the price of a litre.
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Why Diesel Drivers are Winning Bigger
If you drive a Hilux or a Fortuner, you’re probably smiling more than the petrol crowd. Diesel saw a massive cut this month—up to R1.50 per litre for the 0.005% sulphur grade.
Why the lopsided relief?
- Winter Inventories: The Northern Hemisphere had a weirdly mild start to their winter or just over-prepared.
- High Stockpiles: Middle distillates (that's the fancy name for diesel and paraffin) are sitting in storage tanks across Europe and Asia with nowhere to go.
- Logistics Flow: This oversupply forced international wholesale prices down much faster than petrol.
Basically, the global market is flooded with the stuff that keeps our trucks and tractors moving.
What Most People Get Wrong About the Price Calculation
A lot of people think the government just picks a number. I wish. It’s actually a very rigid formula managed by the Central Energy Fund (CEF) and the Department of Mineral and Petroleum Resources.
They use something called the Basic Fuel Price (BFP).
The BFP is what it would cost to buy the fuel from a refinery in a place like Singapore or the Mediterranean and ship it to Durban or Cape Town. But that’s only about half the story. Once the fuel hits our shores, we start piling on the "extras."
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The Tax Man's Slice
Even with the recent cuts, a huge chunk of what you pay isn't for the fuel itself. We have the General Fuel Levy and the Road Accident Fund (RAF) levy. Together, these often make up over 30% of the pump price. In mid-2025, the government actually increased the fuel levy by about 16 cents for petrol and 15 cents for diesel to keep up with inflation.
So, even when oil prices tank globally, these fixed costs keep our prices from ever dropping back to the "good old days" of R12 a litre. It's a bit of a floor that the price can't fall through.
Is This Just a Lucky Streak?
The big question on everyone's mind is whether this will last.
Early data for February 2026 is looking... surprisingly good. The CEF is already whispering about another over-recovery. We could see another R1.20 cut for petrol and maybe even R1.75 for diesel if the Rand stays stable and oil stays cheap.
But there’s a catch. There’s always a catch.
Geopolitics is a mess. One major flare-up in the Middle East or a sudden production cut from OPEC could send Brent Crude back to $80 in a heartbeat. Also, the US recently got involved in some heavy-handed action in Venezuela, which temporarily flooded the market with oil, but that situation is volatile.
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Experts like Roland Tatnall have been warning that while we’re in a "benign phase," it’s fragile. If the Rand slips back to R18 or R19, the relief vanishes instantly.
The Breakdown: What You’re Paying Now (January 2026)
- 95 Unleaded (Inland): R20.75
- 95 Unleaded (Coast): R19.92
- 93 Unleaded (Inland): R20.64
- Diesel 50ppm (Wholesale): R18.52
The "Slate Levy"—which is a mechanism the government uses to balance out the differences between their price projections and reality—is currently at zero. This is great news because it means there isn't an extra "debt" being recovered from motorists at the moment.
How to Handle the Volatility
Since we know the price is basically a roller coaster, the best thing you can do is plan around the "first Wednesday."
That’s the day the price changes every month. If a big hike is coming, fill up on Tuesday night. If a drop is coming—like the one we just had—wait until Wednesday morning.
Keep an eye on the mid-month previews from the Automobile Association (AA). They usually give a pretty accurate "heads up" about two weeks before the change happens.
Also, don't ignore your tire pressure. It sounds like something your dad would nag you about, but under-inflated tires can increase fuel consumption by 3% to 5%. When you're paying R20 a litre, that adds up to a few hundred Rand over a year.
The current outlook for 2026 is cautiously optimistic. We might actually see inflation stay within the Reserve Bank's target range because these lower transport costs help keep food prices from skyrocketing. For now, enjoy the slightly cheaper tank of gas while the global stars are aligned in our favor.
Your Next Steps:
- Check the official Department of Mineral and Petroleum Resources website on the first Tuesday of every month for the final confirmed price.
- Monitor the Rand/Dollar exchange rate; if you see it spiking toward R18, start budgeting for a potential fuel hike in the following month.
- Optimize your driving routes now while prices are lower to lock in those savings for your monthly budget.