New Jersey Drivers Face Another Fuel Cost Increase Starting January 2026
New Jersey will raise gas prices again in January. The third straight gasoline and diesel tax hike on January 1, 2026, will make New Jersey one of the highest-taxed states.
State officials predict 4.2 cent/gallon gas price increases. Diesel will cost 56.1 cents more and gasoline 49.1 cents more in state taxes. This is up from 44.9 cents for gas and 51.9 for diesel. The modest per-gallon increase can pile up for commuters, delivery drivers, and car-dependent families.
There was no major policy change or law this year that caused the increase. This automated correction is about a decade old. Gas taxes are reviewed annually in New Jersey to pay transportation. Statewide road, bridge, and transit maintenance are funded by the Transportation Trust Fund.
The state treasury attributed this year’s growth to two factors. Remote work, electric and hybrid cars, and fuel efficiency have reduced petroleum sales. Tax revenue falls short of infrastructure spending as gas demand lowers. Through its Transportation Trust Fund expansion, the state pledged billions to transportation projects.
The Legislature and Governor Phil Murphy expanded the Transportation Trust Fund for five years with $10 billion in 2024. The state kept raising gas tax revenue. The 2026 fiscal year goal is $2.115 billion, up 4% from last year. Increase fuel taxes annually until 2029.
State Treasurer Elizabeth Maher Muoio allows fuel use. She claimed New Jersey can upgrade its transportation infrastructure without borrowing or cutting budgets with the gas tax. Some argue permanent financing reduces delays and improves road and transit safety.
New Jersey gas taxes have changed dramatically. Due to frequent driving and concerns about forcing residents to buy gas in neighboring states, the state has had one of the lowest fuel taxes in the nation for years. The state raised levies significantly and initiated annual transportation needs evaluations in 2017.
The gas tax has climbed more than fallen. It rose often, hesitated, and fell twice. Drivers paid nine cents more two years ago and less last year. Customers fear inflation and everyday prices, therefore the expected increase follows that.
Jersey has high gas taxes. The 2025 state gas tax is eighth-highest. Alaska fees are low, California expensive. Pennsylvania charges more for gas than New Jersey, although New York and Delaware charge less. Federal 18.4 cent gas taxes raise pump prices and state surcharges.
Despite disputed hikes, state authorities claim annual revisions bring transparency and certainty. Long commuters and gas-dependent workers may pay more in January 2026. New Jersey drivers may need fuel changes.
Sources:
New Jersey Department of the Treasury
State of New Jersey Transportation Trust Fund information
Tax Foundation gas tax data
