The Department of the Treasury announced New Jersey’s gas tax rate will decrease by 1.0 cent per gallon, beginning Oct. 1.

The Aug. 29 move, which officials say came after a thorough review of fuel consumption stats and in consultation with Legislative Budget and Finance Officer Thomas Koenig, comes as inflation and high gas prices dominated much of the summer economic conversation.

While New Jersey motorists have seen a decline over the last several weeks at the pump, prices still remain quite elevated, averaging $3.92 per gallon.

The Treasury says the decision aligns with the state’s 2016 law that requires revenue to support the Transportation Trust Fund, which provides approximately $16 billion over eight years to support critical infrastructure improvements to New Jersey’s roadways and bridges.

“Because actual consumption in Fiscal Year 2022 was moderately above our projections made last August, and consumption in the current fiscal year is projected to be slightly above last fiscal year’s levels, our analysis of the formula dictates a 1.0 cent decrease this coming October,” said State Treasurer Elizabeth Maher Muoio. “We are pleased that this dedicated funding stream continues to provide billions of dollars across the state to support our critical transportation infrastructure needs.”

The move means that on Oct.1, the Petroleum Products Gross Receipts (PPGR) tax will decrease from 31.9 cents to 30.9 cents for gasoline and from 35.9 cents to 34.9 cents for diesel fuel.

The Treasury released data supporting the decision, including revenue collections in FY2022 that are projected to exceed the FY2021 Highway Fuels Revenue Target by $43.1 million, along with an actual surplus for FY2021 that ended up being $2.5 million higher than the $58.8 million surplus that was projected.

Treasury had estimated that FY2022 consumption would decline by 9.3% from pre-pandemic levels in 2019. However, with a better-than-expected recovery, consumption in FY2022 declined by only 7.5% from 2019 levels.

Republicans quickly criticized the announcement, with Sen. Edward Durr, R-3rd District, calling for the Murphy Administration to get behind his plan, the “Gas Price and Inflation Tax Credit Act.” The legislation is a pair of “Give It Back” tax rebates proposed by Senate Republicans to return tax overcollections.

“The Murphy Administration is only lowering the gas tax by a penny because that’s what the law requires them to do,” said Durr. “That might save a family 15 cents a week when they fill their tank. That’s not the kind of savings that will help New Jerseyans struggling with lingering high gas prices and the highest inflation in more than 40 years.”

Durr says his plan for an immediate $500 rebate would help a lot of New Jersey families who can’t keep up with rising costs. “It would make a much bigger difference than 15 cents,” he said.