NJ gas tax hike means more pain at the pump in 2026

⛽ New Jersey’s gas tax will rise in 2026, adding 4.2 cents per gallon.

⛽ It's due to a $23.8M shortfall in the state Transportation Trust Fund.

⛽ NJ already ranks among the highest gas-tax states after major increases in 2016.

In life and New Jersey, nothing is certain except death and taxes.

The state gas tax is going up again for 2026.

For each gallon of gasoline, you'll pay an extra 49.1 cents in taxes. That's an increase of 4.2 cents per gallon from this year.

Diesel will see a similar increase. The gas tax for diesel trucks and pickups will be 56.1 cents.

How the state gas tax works

Most other taxes are a percentage; the sales tax in New Jersey is 6.625%. If you buy something for $100, you'll pay $6.63 in taxes, and if you pay $200, that tax bumps up to $13.25, and so on.

But the gas tax is a flat amount tacked onto each gallon of gas.

That means it's unaffected by the price of gas — whether regular is $3 or $4 a gallon, 49.1 cents of the cost of that gallon will be tax every time.

Why a shortfall mean the gas tax is going up

The gas tax funds the state's Transportation Trust Fund. Under state law, the TTF must provide nearly $11 billion over the next five years for statewide transportation projects.

If less gasoline is consumed in New Jersey than projected, then the state will raise less revenue through the gas tax.

State Treasurer Elizabeth Maher Muoio said that's what happened last year, and they need to increase the rate this year to compensate for the $23.8 million shortfall.

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“We emphasize that this dedicated funding stream continues to provide billions of dollars across the State to support our critical transportation infrastructure needs," Muoio said.

When drivers consume more gasoline than expected, it results in a TTF surplus. That's what happened in 2023, and the gas tax actually dropped on Oct. 1, 2023, by a single penny.

Why does New Jersey have a high gas tax?

In 2025, New Jersey ranked 8th in the nation for the highest gas tax in the country, according to a Tax Foundation study.

But the gas tax in New Jersey was one of the lowest in the nation before it increased by 23 cents on Nov. 1, 2016.

A bill signed by Gov. Chris Christie created the first gas tax increase since 1988.

The bipartisan package expanded a tax credit for low-income residents, eliminated the estate tax, created a new tax deduction for veterans, and lowered the state sales tax.

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