Diesel, Gas Prices to Rise July 1 in Five States
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Relatively routine fuel tax increases are set to take effect July 1 in California, Illinois, Indiana, Missouri and Virginia, while a multiyear effort to annually boost both fuel taxes and fees on EVs is causing controversy in New Jersey.
California’s diesel tax will rise to 45.4 cents a gallon from 44.1 cents, while the state’s gasoline tax edges up to 59.6 cents compared with 57.9 cents per gallon, according to the state Department of Tax and Fee Administration.
The Illinois Department of Revenue adopted fuel tax hikes that rise gradually each year. On July 1, the taxes will be 54.5 cents per gallon for diesel — up from the current 52.9 cents — and gasoline/gasohol taxes will climb to 47 cents a gallon from 45.4 cents.
In Indiana, the tax on a gallon of gasoline will rise a penny to 35 cents per gallon, while the tax on diesel and biodiesel will rise two cents to 59 cents a gallon, based on an Indiana Department of Revenue announcement from April.
Murphy
Travelers on roads in Missouri, which makes no distinction between fuel taxes on diesel and gas, will see nearly a 3-cent increase on motor fuel taxes to 27 cents per gallon — above today’s 24.5 cents — on July 1. The state’s fuel tax rate will jump again on July 1, 2025, to 29.5 cents per gallon, according to the Missouri Department of Revenue.
In New Jersey, a plan to gradually increase fuel taxes about 1.9 cents per year over the next five years — while also creating an annual electric vehicle fee — is drawing ire from stakeholders.
The law, passed in March by Gov. Phil Murphy, will boost fuel taxes from their current levels of 49.3 cents for diesel and 42.3 cents for gas. The measure revises the way the state’s tax rates are calculated while also establishing a $250 EV fee this year that would increase $10 each year until reaching $290.
Revenue generated from the tax hikes will help fund infrastructure projects. The specific fuel tax amounts to be levied will be determined each fiscal year by the state treasurer.
Trade group Americans for Tax Reform objected to the move, and believes businesses will be harmed by the law.
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“The increase in the price of fuel would leave gas stations and other fuel providers in the state vulnerable to surrounding states such as Pennsylvania and New York that would offer cheaper gas prices, even though these states also have exorbitant gas taxes,” the group claimed. “With the increase in the gas tax, New Jersey residents, fuel providers, motorists and anyone visiting the state can expect a greater tax burden that they will now have to endure for the next four years.”
In Virginia, the tax on a gallon of diesel will rise to 31.8 cents from 30.8 cents, while gasoline taxes will rise to 30.8 cents from 29.8 cents. Taxes for blended diesel will rise a penny to 31.8 cents, while the tax on blended gas will rise by the same amount to reach 30.8 cents.
In neighboring Maryland, however, motor fuel taxes are set to drop. According to the state comptroller’s office, as of July 1 gas and gasohol will be taxed at 46.1 cents compared with the current 47 cents a gallon, while taxes on diesel and biodiesel will fall to 46.85 cents from today’s 47.75 cents per gallon.
