The Oregon gas tax is 40 cents per gallon, a rate that took effect January 1, 2024, and applies equally to gasoline and diesel. Add the federal excise tax of 18.4 cents per gallon on gasoline, and an Oregon driver pays at least 58.4 cents per gallon in combined state and federal taxes before any local fuel tax is layered on top. That total could climb again if voters approve Ballot Measure 120, which would push the state rate to 46 cents.
Current State Fuel Tax Rate
Oregon taxes gasoline, diesel, and other use fuels at 40 cents per gallon.1Oregon Department of Transportation. Frequently Asked Questions – Fuels Tax The tax is collected at the wholesale level: licensed fuel dealers pay the state before product is delivered to gas stations, and the cost is folded into the posted pump price rather than itemized at the register.
Several Oregon cities add their own local fuel taxes on top of the state rate. Eugene, for instance, adds 5 cents per gallon and is one of roughly 22 local jurisdictions statewide that collect a local fuel tax.2City of Eugene. Local Gas Tax Local rates vary, so the total tax burden shifts depending on where you fill up.
What You Actually Pay at the Pump
The state figure is only part of what you’re paying. The federal government adds 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel, rates Congress set in 1993 and has not changed since. Combined with Oregon’s 40 cents, a driver filling up with regular gasoline pays at least 58.4 cents per gallon in state and federal taxes before local taxes apply.
In Eugene, where the local tax adds 5 cents, the total reaches 63.4 cents per gallon. If Measure 120 passes, that Eugene total would climb to 69.4 cents. Those combined rates are worth keeping in mind when comparing pump prices across state lines.
How the Rate Got to 40 Cents
The jump from Oregon’s previous 30-cent rate to today’s 40 cents came through House Bill 2017, a transportation funding package the legislature passed in 2017.3Oregon Department of Transportation. HB 2017 Overview Rather than a single hike, the law staggered 10 cents of increases over six years:
- January 1, 2018: 4-cent increase to 34 cents
- January 1, 2020: 2-cent increase to 36 cents
- January 1, 2022: 2-cent increase to 38 cents
- January 1, 2024: 2-cent increase to 40 cents
The first bump took effect automatically. The three later increases were conditional. Under Section 45 of HB 2017, ODOT had to file reports with the legislature by December 1 of 2019, 2021, and 2023 certifying that it had identified shovel-ready highway projects for the new revenue, was following uniform spending standards, and had met specific project benchmarks.4Oregon State Legislature. 2019 ODOT Conditional Fuels Tax Increase Accountability Report Missing any of those deadlines would have blocked the next scheduled increase. ODOT met the benchmarks, and each increase took effect on schedule.3Oregon Department of Transportation. HB 2017 Overview
Ballot Measure 120 and a Possible Further Increase
Oregon voters face another potential rate change through Ballot Measure 120, which would raise the state fuel tax to 46 cents per gallon.5Oregon Secretary of State. Measure 120 Explanatory Statement The measure is a referendum: the legislature already passed the underlying law, and voters are being asked to approve or reject it.
If voters approve Measure 120, the state fuel tax rises to 46 cents per gallon. If they reject it, fuel taxes, registration fees, and title fees stay at their current levels.5Oregon Secretary of State. Measure 120 Explanatory Statement The measure amends ORS 319.020 (gasoline) and ORS 319.530 (diesel and use fuels), replacing the current statutory base rate with the new 46-cent figure.6Oregon Secretary of State. Measure 120 Text of Measure
Where the Money Goes
Oregon’s Constitution puts strict limits on how fuel tax revenue can be used. Article IX, Section 3a requires that money from motor fuel taxes go exclusively toward building, maintaining, and operating public roads, highways, and roadside rest areas. The legislature cannot redirect gas tax dollars into the general fund or spend them on non-transportation purposes. Oregon courts have interpreted this narrowly: spending must “primarily and directly facilitate motorized vehicle travel.”7Oregon Department of Transportation. Oregon’s Constitutional Dedication of Highway Funds
Fuel tax revenue flows into the State Highway Fund. Under ORS 366.739, the statutory allocation formula sends roughly 24 percent of fuel-related revenue to counties and about 16 percent to cities, with the state retaining the largest share for interstate and highway projects run by ODOT.8Oregon Public Law. Oregon Code 366.739 – Allocation of Moneys to Counties and Cities Generally When other Highway Fund revenue sources such as registration and truck fees are added in, the broader distribution roughly follows a 50/30/20 split among the state, counties, and cities.
EVs and Fuel-Efficient Vehicles Pay Differently
If you drive a car that burns little or no gasoline, you contribute less to road funding through the pump. Oregon addresses that gap with annual registration surcharges tied to fuel efficiency. Under ORS 803.422, those surcharges run from $20 per year for vehicles rated 0 to 19 MPG, $25 for 20 to 39 MPG, and $35 for 40 MPG or greater, up to $115 per year for electric vehicles.9Oregon State Legislature. Oregon Code Chapter 803 – Vehicle Title and Registration For a standard two-year registration, an electric vehicle owner not enrolled in Oregon’s per-mile charge program pays $316 total.10Oregon Department of Transportation. OReGO – Oregon’s Road Usage Charge Program
Oregon also offers a voluntary alternative through OReGO, the state’s road usage charge program. Participants pay 2 cents per mile driven and receive a credit for any gas tax they pay at the pump, so they aren’t taxed twice.10Oregon Department of Transportation. OReGO – Oregon’s Road Usage Charge Program Enrolled drivers pay the base $43 annual registration fee plus the per-mile charge instead of the higher surcharges. New electric vehicles and cars rated above 40 MPG can save between $35 and $115 per year on DMV fees through enrollment, depending on how many miles they drive.11Oregon Department of Transportation. OReGO Low-mileage EV drivers tend to come out ahead; high-mileage drivers may pay more under OReGO than they would with the flat surcharge.