What to Know
- New Jersey's Department of the Treasury announced a gas tax increase of 9.3 cents per gallon 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 will increase 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.
New Jersey's Department of the Treasury announced a gas tax increase of 9.3 cents per gallon due to "lower fuel consumption trends, which have been exacerbated by the COVID-19 pandemic." The increase will go into effect this fall.
According to the treasury department, consumption of gasoline fell by a total of 38.7 percent from March to May in the state. Diesel fuel consumption decreased by 16.5 percent. The need for gasoline and diesel fuel continues to be low as people work from home and limit extracurricular activity due to the ongoing pandemic.
The increase will ensure 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 Friday.
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.
Because of the formula outlined in the law, the PPGR tax on gasoline and diesel fuel will increase 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. 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.
“As we’ve noted before, any changes in the gas tax rate are dictated by several factors that are beyond the control of the administration,” State Treasurer Elizabeth Maher Muoio said in a statement. “The law enacted in 2016 contains a specific formula to ensure that revenue is meeting a certain target. When it does not, the gas tax rate has to be adjusted accordingly in order for us to meet our obligation under the law and fully fund the state’s many pressing transportation infrastructure needs. Highway fuels consumption took a significant hit in FY 2020 because of the economic downturn caused by the COVID-19 pandemic.”
