New Jersey gas tax set to rise January 1 as national prices fall below $3 as New Jersey to tax gas at 49.1 cents per gallon.
TRENTON, NJ – New Jersey was once the state where New Yorkers and Pennsylavania residents came to fuel up on cheap gas. That is now a distant memory as New Jersey is quickly becoming one of the most taxed states in America when it comes to gasoline.
While gas prices continue to drop across most of the United States, New Jersey drivers will see a price hike at the pump on January 1, 2026.
State officials confirmed that the gas tax will increase by 4.2 cents per gallon for both gasoline and diesel, bringing the total to 49.1 cents per gallon for gasoline and 56.1 cents for diesel.
The increase is required under a 2024 law designed to meet revenue goals for the New Jersey Transportation Trust Fund, which finances road, bridge, and tunnel projects statewide.
According to the state, the adjustment is driven by lower fuel consumption, which has reduced overall tax revenue even as operating costs continue to rise.
January 1 tax adjustment
Beginning January 1, 2026, the statewide motor fuels tax will climb to 49.1 cents per gallon for gasoline and 56.1 cents per gallon for diesel.
The increase ensures the Transportation Trust Fund meets its statutory revenue targets under Chapter 7 of 2024.
Officials noted that the system automatically adjusts each year to maintain consistent funding for infrastructure improvements despite fluctuations in fuel use.
National gas prices trending downward
Across the country, gas prices have dropped below $3 per gallon for the first time in four years.
The national average stands between $2.91 and $2.94 as of mid-December, according to industry reports.
Analysts attribute the decline to lower crude oil prices, weaker post-summer demand, and the seasonal switch to less expensive winter-blend gasoline.
Regional differences and outlook
Drivers in states such as Ohio, Michigan, and Texas have seen sharper declines, while prices in California and other western states remain higher.
Experts expect prices to stay low heading into the holidays as demand remains soft and refinery output continues to outpace consumption.
New Jersey’s gas tax, however, will buck the national trend with a 4.2-cent increase on January 1 to meet the state’s transportation funding goals.
New Jersey’s gas tax, however, will buck the national trend with a 4.2-cent increase on January 1 to meet the state’s transportation funding goals.
