Delta station in Rochelle Park

By Cecilia Levine From Daily Voice

New Jersey’s gas tax will rise by 4.2 cents per gallon come 2026.

The increase follows a review of fuel consumption data and a required consultation with the Legislative Budget and Finance Officer in Trenton, the State Treasury Department announced.

The change is tied to a 2024 law that gradually raises the Highway Fuel Cap from Fiscal Year 2025 through Fiscal Year 2029. The Fiscal Year 2026 cap is set at $2.115 billion, which is 4.1 percent higher than the previous level of $2.032 billion, officials said.

“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,” State Treasurer Elizabeth Maher Muoio said. She added that the “dedicated funding stream continues to provide billions of dollars across the State to support our critical transportation infrastructure needs.”

Under the law, New Jersey must provide nearly $11 billion over five years for roadway and bridge improvements through the Transportation Trust Fund. The statute requires the Petroleum Products Gross Receipt Tax rate to adjust each year to meet the Highway Fuel Cap.

The gas tax is made up of two parts: the Motor Fuels Tax and the Petroleum Products Gross Receipt Tax. On Jan. 1, 2026, the PPGRT rate for gasoline will increase from 34.4 cents to 38.6 cents, and diesel will increase from 38.4 cents to 42.6 cents. When combined with the fixed Motor Fuels Tax, drivers will pay 49.1 cents per gallon for gasoline and 56.1 cents per gallon for diesel.

Treasury officials said the adjustment reflects two factors outlined in the statute: a $23.8 million shortfall from Fiscal Year 2025 and a projected 1 percent decline in fuel consumption for Fiscal Year 2026. Lower consumption means a higher rate is needed to meet the state’s revenue target.

A chart released with the announcement shows the annual tax rate changes since 2017. It notes five increases, two decreases and two years with no change under the state’s formula.

The new rate takes effect at 12:01 a.m. on New Year's Day, impacting drivers statewide.