Beginning on Jan. 1, 2026, New Jersey’s gas tax will increase by 4.2 cents per gallon to 49.1 cents for gasoline, and 56.1 cents for diesel fuel, the Department of Treasury says.
The annual adjustment is the result of a 2024 law that gradually raises the state’s Highway Fuel Cap from Fiscal Year 2025 through FY 2029 to support the New Jersey’s Transportation Trust Fund (TTF) program, which provides funding for statewide transportation infrastructure projects.
The Fiscal Year 2026 Highway Fuel Cap is set by statute at exactly $2.115 billion, which is 4.1% higher than the previous baseline level of $2.032 billion, and it will increase each fiscal year, reaching $2.366 billion in FY 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,” State Treasurer Elizabeth Maher Muoio said in a statement on Monday. “We emphasize that this dedicated funding stream continues to provide billions of dollars across the state to support our critical transportation infrastructure needs.”
By law, New Jersey’s TTF program is required to provide nearly $11 billion over five years to support critical infrastructure improvements to the state’s roadways and bridges. To ensure the State has the funds necessary to support these projects, the law dictates that the Petroleum Products Gross Receipt Tax (PPGRT) rate must be adjusted accordingly to generate enough revenue to meet the statutory Highway Fuel Cap for that fiscal year.
What is generally called the “gas tax” or the “highway fuels tax” is really two separate taxes – the Motor Fuels Tax and the PPGRT – that are levied on both gasoline and diesel fuel.
Under the formula explicitly outlined in the 2024 law, the PPGRT rate will increase on Jan. 1, 2026, from 34.4 cents to 38.6 cents for gasoline and from 38.4 cents to 42.6 cents for diesel fuel. When combined with the Motor Fuels Tax, which is fixed at 10.5 cents for gasoline and 13.5 cents for diesel fuel, the total tax rates that motorists will pay for gasoline and diesel fuel will be 49.1 cents and 56.1 cents, respectively.
