What to Know
- New Jersey's Department of the Treasury said a gas tax increase of 9.3 cents per gallon is due to "lower fuel consumption trends, which have been exacerbated by the COVID-19 pandemic"
- Consumption of gasoline and diesel fuel continues to be low as people work from home and limit extracurricular activity due to the ongoing pandemic
- The tax on gasoline and diesel fuel increased on Oct. 1 from 30.9 cents to 40.2 cents for gasoline and from 34.9 cents to 44.2 cents for diesel fuel
A New Jersey gas tax increase of 9.3 cents per gallon went into effect at midnight on Thursday.
The state's Department of the Treasury said the tax hike was due to "lower fuel consumption trends, which have been exacerbated by the COVID-19 pandemic." Consumption of gasoline fell by a total of 38.7 percent from March to May in the state, according to the department. Diesel fuel consumption decreased by 16.5 percent.
While more and more people have returned to work, the need for gasoline and diesel fuel continues to be low as many still work from home and limit extracurricular activity due to the ongoing pandemic.
The increase is in compliance with the 2016 law that requires a steady stream of revenue to support the state’s Transportation Trust Fund (TTF) program, the state said.
Under the 2016 law signed by former Gov. Chris Christie, New Jersey’s TTF program is required to provide $16 billion over eight years to support infrastructure improvements to the state’s roadways and bridges. As a means of guaranteeing that the state has the necessary funds to support these projects, the law outlines that the Petroleum Products Gross Receipt (PPGR) tax rate must be adjusted accordingly to generate about $2 billion annually.
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Because of the formula outlined in the law, the PPGR tax on gasoline and diesel fuel increased from 30.9 cents to 40.2 cents for gasoline and from 34.9 cents to 44.2 cents for diesel fuel. When coupled with the current 10.5 cent Motor Fuels Tax rate on gasoline and the 13.5 cent rate for diesel fuel, the total tax rates for gasoline and diesel fuel will be 50.7 cents and 57.7 cents, respectively.
