Fuel prices are set for a hefty drop in January after the rand's recent strong performance against the US dollar‚ despite increases in international petroleum prices during December.

This is according to the Automobile Association (AA) based on unaudited month-end fuel data released by the Central Energy Fund.

"The rand has had a very strong run against the dollar since the middle of the month‚ gaining considerable ground after the ANC's electoral conference chose Cyril Ramaphosa as the new leader of the party‚" the AA said in a statement on Thursday. "After opening the month at R13.80 to the dollar‚ the rand is now testing the R12.30 level."

The association said that despite higher international oil prices over December‚ all grades of fuel were set to fall at the Department of Energy's next price adjustment. "We expect petrol will be down by up to 34 cents a litre‚ diesel by 26 cents and illuminating paraffin by 28 cents‚" the AA said.

"The rand – and‚ by extension‚ fuel prices – have proven vulnerable to political developments in South Africa over the past year‚" the association commented. "Cyril Ramaphosa's political and fiscal position ahead of the February 2018 budget speech is likely to be the most influential determining factor for fuel price movements in the short term‚" the AA added.