The Central Energy Fund (Cef) has released figures that forecast a substantial drop in the fuel price in the new year.

Cef is a state-owned energy company that answers to the Department of Mineral Resources and Energy – the department responsible for regulating fuel prices.

The energy company expects the ULP 93 and 95 price to drop by R1.53, 500ppm diesel by R3.46, 50ppm diesel by R3.52 and illuminating paraffin by R2.27 from January 4, 2023.

Cef says that 30% of the petrol price is attributed to levies, 53% to basic price and the remaining 17% to the margins, storage as well as distribution costs.

In December 2021, ULP 93 cost R20.07 (currently R23.16), ULP 95 cost R20.29 (currently R23.46), diesel 50ppm cost R17.97 (currently R24.23), and diesel 500ppm cost R17.92 (currently R23.92).

The forecasted drop in fuel prices comes amid falling oil prices and a strengthening rand.

The drop will come as a relief for South African motorists who saw prices reach historical peaks in July.