New Jersey fuel tax rates increase starting Oct. 1

Truckers and motorists fueling in New Jersey soon will have a slight bump in fuel tax expenses.

Each October, the state revises gas and diesel rates to adjust for any shortage or surplus during the prior fiscal year. As a result, starting Oct. 1, fuel rates will increase by about a penny.

This is New Jersey’s first fuel-rate increase in three years. One year ago, truck drivers and motorists in the state received a penny price break. The previous year, the tax rates decreased by 8.3 cents.

Oct. 1 changes

The state’s fuel rate includes two components: a petroleum products gross receipt tax and a motor fuels tax.

Since October 2022, the petroleum products gross receipt tax has been set at 30.9 cents for gas and 34.9 cents for diesel.

Additionally, the motor fuels tax rate on gas is 10.5 cents. The diesel rate is 13.5 cents.

The total tax rates for gas and diesel are 41.4 cents and 48.4 cents, respectively.

Effective Oct. 1, the petroleum products gross receipt tax on gas will increase by 0.9 cents to 31.8 cents, and the diesel tax will increase by the same amount to 35.8 cents. When combined with the motor fuels tax, the total tax for gas will be 42.3 cents, and the total tax for diesel will be 49.3 cents.

Why the tax changes?

A seven-year-old state law requires a steady stream of revenue to support the state’s Transportation Trust Fund. The rule requires the state treasurer to adjust the tax rate each year to ensure it brings in revenue needed to pay the bills for transportation work.

The fund is required to provide $2 billion annually to support infrastructure work.

State Treasurer Elizabeth Muoio said the upcoming fuel rates increase is due to actual consumption in fiscal year 2023 being “slightly below” projections made in August 2022.

Muoio attributed the results primarily to lower diesel use and to the fact consumption in the current fiscal year is projected to be slightly above last fiscal year’s levels.

“As mandated by the 2016 law, this dedicated funding stream continues to provide billions of dollars across the state to support crucial transportation infrastructure needs,” Muoio said in prepared remarks. LL

More Land Line coverage of news from New Jersey is available.