New Jersey to raise gas tax rate nearly 10 cents per gallon on Oct. 1

NEW JERSEY (WABC) -- New Jersey announced Friday an increase in the state's gas tax rate by nearly 10 cents per gallon.

Effective October 1, the New Jersey gas tax will increase 9.3 cents per gallon.

The Department of Treasury says that lower fuel use trends, due in part to COVID-19, necessitated the increase in order to ensure funding to support the state's Transportation Trust Fund (TTF) program.

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Under the 2016 law signed by former New Jersey Governor Chris Christie, the TTF program is required to provide $16 billion over eight years to support critical infrastructure improvements to the state's roadways and bridges.

The law orders that the gas tax rate must be adjusted accordingly to generate roughly $2 billion per year.

"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. "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."

She says highway fuel consumption took a significant hit in 2020 because of the economic downturn caused by the COVID-19 pandemic.

The treasury noted that use of gasoline declined by a total of 38.7% from March to May, while diesel fuel declined by 16.5%.

They say it continues to decline as many people continue to work from home and limit outdoor activities.

In addition to gas rates rising from 30.9 cents to 40.2 cents, diesel fuel will also increase from 34.9 cents to 44.2 cents.

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