Drivers in New Jersey are facing yet another increase in one of the highest gas taxes in the country. Starting January 1, the tax will jump by 4.2 cents, bringing the total to 49.1 cents per gallon for gasoline and 56.1 cents for diesel.
This change comes from a 2024 law, and it’s worth noting that New Jersey is the only state that doesn’t permit self-service gas pumps. Based on 2022 figures, this tax hike is expected to raise the average annual cost for each driver by roughly $27, which totals around $320 just in state gas taxes.
Alex Stevens, who manages policy and communications at the Energy Institute, stated, “New Jerseyans pay some of the highest gas taxes in the country.” He continued, suggesting that if the state reduced taxes to the national average of about 33 cents, the current prices would be much lower than what residents are paying now.
Interestingly, while New Jersey holds the eighth-highest gas tax rate in the U.S. as of 2025, it falls somewhere in the middle when it comes to overall gas prices, according to the Tax Foundation.
The state has historically kept self-service pumps out of the picture, following a law designed to protect small gas stations and address safety concerns. This has maintained a unique position in the way residents fill up their tanks.
As of New Year’s Eve, residents were paying an average of $2.833 for a gallon of gas, which was slightly lower than the national average of $2.839, as reported by the American Automobile Association.
Stevens pointed out that despite higher taxes, gas prices in New Jersey largely depend on the existing infrastructure. The state’s geographical location, he added, means it’s near areas with high demand, leading to a more developed infrastructure.
Moreover, national gas prices have been on a downward trend recently, dropping to levels seen before the pandemic for the first time in nearly five years.
The latest tax hike is part of a plan established by outgoing Democratic Governor Phil Murphy, with the tax expected to increase annually through 2029. Rep. Nellie Poe, a sponsor of the bill, is also now a member of the U.S. House of Representatives, having previously served in the state senate.
Critics are quick to highlight that New Jersey families will bear the brunt of this cost increase. Maureen O’Toole, from the National Republican Congressional Committee, criticized Poe’s role, claiming that higher gas prices will burden working individuals from January 1, attributing these increases to Poe’s history of raising taxes.
While an earlier proposal had suggested a smaller tax rise of about 2 cents, the state has adjusted this significantly to account for lower-than-expected actual consumption. The revenue generated from this increase is projected to fund approximately $11 billion in infrastructure improvements, particularly for roads and bridges.
Stevens adds that, despite the high gas tax, New Jersey ranks poorly in overall spending efficiency on infrastructure. “They collect a tremendous amount of revenue from high gas taxes, but that money goes to spending in areas of New Jersey that rank very low,” he noted.
