Treasury Announces Gas Tax Rate will Rise 4.2 cents Starting Jan. 1
Gasoline prices have retreated below $3 for much of the state, but motorists will get little respite from lower prices because the state’s gas tax rate is set to rise again.
The Department of the Treasury announced Dec. 1 that New Jersey’s gas tax rate will rise by 4.2 cents per gallon on Jan. 1, 2026 to support the state’s Transportation Trust Fund (TTF) program.
This increase is the result of the 2024 law (Chapter 7) which gradually raises the state’s Highway Fuel Cap from fiscal year 2025 through fiscal year 2029. The fiscal year 2026 Highway Fuel Cap is set by statute at exactly $2.115 billion, which is 4.1% higher than the prior baseline level of $2.032 billion, and will increase each fiscal year, reaching $2.366 billion in fiscal year 2029.
“Due to the new statutory target, and because actual consumption has trended below last fiscal year’s levels, our analysis of the new formula dictates a 4.2 cent increase this coming January,” said State Treasurer Elizabeth Maher Muoio. “We emphasize that this dedicated funding stream continues to provide billions of dollars across the State to support our critical transportation infrastructure needs.”