Kerrie Joyce 
The New Jersey Department of the Treasury announced on December 1st, 2025, that the state’s gas tax will increase in the new year. New Jersey already has one of the highest gas tax rates in the country, and will see an additional increase by 4.2 cents per gallon come January 1st, 2026. New Jersey’s gas tax funds projects to improve the state’s transportation infrastructure. Read on to learn more about the gas tax and what drivers can expect at the fuel pump next month.
What is the Gas Tax?
The New Jersey gas tax is a specific tax applied to gasoline and diesel fuel transactions. The rate as of 2025 for gasoline purchases is 44.9 cents per gallon of gasoline and 51.9 cents per gallon of diesel fuel. Beginning January 1st, 2026, a 4.2-cent increase will be applied to both fuel types.
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Every state has some form of gas tax to fund road maintenance projects, per the Tax Foundation, and New Jersey’s is the 8th highest in the country. According to NJ Spotlight News, New Jersey’s gas tax revenue is directed into the state Transportation Trust Fund (TTF), which funds road, bridge, and rail-network improvements.
What is Behind the Increase?
State law initially created the Transportation Trust Fund in 1984 and has been amended many times since. Most recently, in 2024, Governor Phil Murphy and state lawmakers set higher targets, gradually raising $10 billion from fiscal years 2025-2029. Every year, state officials, including the State Treasurer, evaluate whether the gas tax rate is generating enough revenue to fund planned transportation projects. The gas tax rate is then adjusted if needed, increasing if more revenue is needed to fund projects or decreasing if there is a surplus. Regarding the increase set for 2026, New Jersey State Treasurer Elizabeth Maher Muoio cited a decrease in fuel purchases from consumers in addition to the state’s higher targets in the following statement:
“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.”
The increase is set to take effect on January 1st, 2026.
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