Drivers across New Jersey have been enjoying a bit of a break lately when it comes to filling up their tanks. With winter setting in, fewer people are hitting the road, and that dip in demand—paired with a boost in fuel supplies—has driven gas prices to some of the cheapest levels seen in recent memory. Nationally, it’s been even better, with averages hitting five-year lows. But here’s the catch: come the new year, things could shift in the Garden State because of an upcoming bump in the gas tax.
State officials from the Treasury Department made the announcement earlier this month, explaining that the tax on gasoline will go up by 4.2 cents per gallon starting January 1, 2026. This isn’t some random decision; it’s part of a yearly tweak designed to keep funding flowing for road repairs, bridges, and other transportation needs. Right now, the tax sits at 49.1 cents for regular gas and 56.1 cents for diesel. The reason for this particular hike? Fuel use has been lower than expected over the past fiscal year. When people buy less gas, the tax rate adjusts upward to make up the difference—it’s like a built-in mechanism to ensure the pot for infrastructure stays full.
Experts are pointing to a few factors behind the current low prices. For one, global oil supplies have improved, with groups like OPEC+ ramping up output earlier this year, which helped ease costs at the refinery level. Oil has been hovering between $58 and $60 a barrel lately. On top of that, demand has cooled off as the colder months slow down travel. Even during the hustle of Thanksgiving, prices kept trending downward, dropping a couple of cents from the month before on a national scale.
In New Jersey specifically, the numbers tell a similar story. As of December 9, the statewide average for a gallon of regular was sitting at $2.96, down just a penny from the day before. Compare that to $3.01 a week earlier, or $2.97 a month ago—it’s been pretty steady, and even a touch higher than the $2.94 from this time last year. Tracking sites like GasBuddy have confirmed this is the lowest it’s been in the state over the past 12 months. Of course, it’s a far cry from the peak of $5.05 back in mid-2022, when everything from inflation to supply chain issues was pushing costs through the roof.
AAA Northeast summed it up, noting that the combination of better availability and reduced usage has been a win for consumers. But with this tax adjustment on the horizon, that win might not last long. The federal Energy Information Administration has also highlighted how international production changes play into this, keeping an eye on global trends that filter down to local pumps.
For folks in places like Sparta, the news hits close to home. Long-time resident Mark Thompson, who commutes daily for work, shared his thoughts: “It’s frustrating to see prices finally easing up after all these tough years, only to have the state step in with another tax. We rely on our cars here, and it all adds up.”
As winter drags on, it’s worth watching how these dynamics play out. If demand stays low and supplies hold steady, the tax hike might not sting as much right away. But for New Jerseyans already budgeting for holidays and heating bills, it’s a reminder that relief at the gas station can be fleeting. Motorists might want to top off now while the getting is good, before the calendar flips and the costs creep back up.
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.