New Jersey Gas Tax Rises 4.2 Cents
The increase took effect January 1 as several Hudson-area tolls and transit fares also climb in early 2026.
Updated on Nov. 9, 2026 in Taxes
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New Jersey's gas tax rose 4.2 cents on January 1, bringing the rate to 49.1 cents per gallon for gasoline and 56.1 cents per gallon for diesel. The increase is part of a 2024 transportation funding law that raises the gas tax annually through 2029.
Why it matters
The higher tax adds to fuel costs for New Jersey drivers, who already face gas averaging $4.10 per gallon according to AAA. The increase is set by the 2024 law that funds the Transportation Trust Fund, so further annual increases are scheduled through the end of the decade.
The gasoline tax rose 4.2 cents to 49.1 cents per gallon, while diesel is taxed at 56.1 cents per gallon under state law. The state finance review due November 15 will determine whether the rate changes again for the following year.
The players
New Jersey Department of the Treasury
The state agency responsible for administering the state's tax laws, including the motor fuel tax that funds transportation projects.
Port Authority of New York and New Jersey
The bi-state agency that operates the PATH transit system and the Hudson crossings where E-ZPass discounts apply.
AAA
The American Automobile Association, which publishes widely cited figures tracking average retail gasoline prices.
The details
Under the 2024 Transportation Trust Fund law, the gas tax increase amount climbs annually through 2029, with state finance officials required to review the figures by November 15. Separately, Hudson-area commuters face higher costs as the off-peak E-ZPass discount shrinks by 50 cents on January 3 and PATH fares rise 25 cents.
Timeline
December 2025: Port Authority approved the off-peak E-ZPass discount reduction and PATH fare increase.
January 1, 2026: New Jersey gas tax rose 4.2 cents; NJ Turnpike and Garden State Parkway tolls rose 3%.
January 3, 2026: Off-peak E-ZPass discount shrinks by 50 cents; PATH fares and Pennsylvania Turnpike tolls rise.
November 15, 2026: State finance officials must complete the gas tax review.
2029: The annual gas tax increase schedule under the 2024 law ends.
Market Dynamics
The 4.2-cent increase is the scheduled step under the 2024 Transportation Trust Fund law, which lifts the gas tax each year through 2029. Pennsylvania Turnpike tolls rising 3.5% on January 3 show neighboring states adjusting transportation charges in the same period.
Drivers will pay roughly 4 more cents per gallon at the pump, and frequent Hudson crossers will pay more on E-ZPass and PATH fares starting January 3. Households that commute by car or transit should factor these higher monthly costs into their personal budgets.
The takeaway
Higher fuel and commuting costs are now a fixed part of the New Jersey budget through 2029, so drivers and commuters should plan for steady annual increases. Reviewing your monthly transportation spending now can help you absorb the scheduled changes.
What happens next
State finance officials must complete the gas tax review by November 15, 2026, which will determine whether the rate changes again effective January 1, 2027.
Further reading
For more on how state levies like this one work, see Taxes coverage in New Jersey.
Source note: This article includes information reported by New Jersey 101.5.
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