The Pennsylvania gasoline tax for 2026 is 57.6 cents per gallon in oil company franchise tax plus a separate 1.7 cents per gallon liquid fuels tax, for a combined state levy of roughly 59.3 cents. Add the 18.4-cent federal excise tax and drivers in the Commonwealth pay about 77 cents in taxes on every gallon of regular gasoline.1Pennsylvania Department of Revenue. Motor Fuel Tax Rates That puts Pennsylvania among the five most expensive states in the country for fuel taxes, trailing only California, Illinois, and Washington at the state level.
What Makes Up the Rate
The tax you pay at the pump is really three layers stacked together. You never see them itemized on the pump display because they’re collected upstream from distributors, and the cost is folded into the retail price before the fuel reaches your gas station.
- Oil company franchise tax (OCFT): 57.6 cents per gallon on gasoline in 2026. This is the largest component. It’s imposed under 75 Pa. C.S. § 9502 as a privilege tax on oil companies doing business in Pennsylvania.2Pennsylvania General Assembly. Pennsylvania Code Title 75 – 9502 Imposition of Tax
- Liquid fuels tax: 1.7 cents per gallon, a separate excise tax under Chapter 90 of the Vehicle Code.1Pennsylvania Department of Revenue. Motor Fuel Tax Rates
- Federal excise tax: 18.4 cents per gallon, unchanged since 1993. That figure is an 18.3-cent gas tax plus a 0.1-cent fee for the federal Leaking Underground Storage Tank fund.3U.S. Energy Information Administration. How Much Tax Do We Pay on a Gallon of Gasoline and on a Gallon of Diesel Fuel
Oil companies remit the franchise tax to the Department of Revenue based on gallons handled. The system lets the state deal with a small number of distributors instead of auditing thousands of retail stations.
How the Annual Rate Is Set
The OCFT rate is not fixed by the legislature each year. It moves with a formula tied to the average wholesale price of gasoline. The Department of Revenue tracks wholesale prices throughout the year and publishes the finalized rate each December for the following calendar year.
Act 89 of 2013 reshaped that formula. It phased out a cap that had limited how much of the wholesale price could be taxed. The cap rose from $1.87 per gallon in 2014 to $2.49 in 2015 and disappeared entirely on January 1, 2017. Act 89 also set a price floor of $2.99 per gallon. Even if the wholesale price of gasoline drops to $2.00, the tax is calculated as though the price were $2.99.4Pennsylvania General Assembly. Pennsylvania Code Title 75 Chapter 95 – Taxes for Highway Maintenance and Construction
The floor keeps transportation funding stable when oil prices collapse, as they did in 2015 and 2020. The trade-off is that drivers don’t see tax relief when wholesale prices fall below that threshold. Above the floor, the rate moves in both directions with the market.
Where the Money Goes
All fuel tax revenue flows into the Motor License Fund, and the Pennsylvania Constitution restricts how that money can be spent. Article VIII, Section 11 requires gasoline and motor fuel excise tax proceeds to be used solely for building, rebuilding, maintaining, and repairing public highways, bridges, and air navigation facilities. The Constitution forbids diverting these funds to other purposes, with a narrow exception for short-term loans to the General Fund that must be repaid within the same fiscal year at the prime interest rate.5Pennsylvania General Assembly. Constitution of the Commonwealth of Pennsylvania
Within those bounds, statute sets detailed allocation formulas. For the 55-mill layer of the tax alone, the current breakdown directs:
- 40% to highway capital projects
- 19% to county maintenance districts for highway upkeep
- 14% to the Pennsylvania Turnpike Commission
- 13% to bridge projects statewide
- 12% to local municipal roads
- 2% to county and forestry bridges, distributed by bridge deck area
A separate 38.5-mill layer sends 48% to PennDOT for expanded highway and bridge maintenance, 40% to county maintenance distributions, and 12% to municipalities. From the base 60-mill layer, $35 million annually goes to the Multimodal Transportation Fund for transit and freight projects.2Pennsylvania General Assembly. Pennsylvania Code Title 75 – 9502 Imposition of Tax
State Police Funding
The Motor License Fund also pays for a substantial portion of the Pennsylvania State Police budget for highway patrol. Audits have found that billions have moved from the fund to the State Police since 2012–13, with the transfer consuming as much as 29% of Motor License Fund payments in a single year. At one point, about 65% of the State Police budget came from fuel tax revenue.
Past Pennsylvania auditors general have argued this practice starves PennDOT of money needed for structurally deficient bridges and deteriorating highways. Supporters have said highway patrol is a legitimate road-safety expenditure permitted under the Constitution’s language about “safety on public highways.” The legislature has capped the transfers, but the split between police and pavement remains contested.
Who Is Exempt
Most drivers pay the full tax on every gallon. The law carves out exemptions for specific buyers when fuel is sold and delivered to them:6Pennsylvania Department of Revenue. Motor Fuels Tax
- The U.S. government and all federal agencies
- The Commonwealth and its political subdivisions, including counties, cities, boroughs, townships, and school districts
- Volunteer fire companies, ambulance services, and rescue squads
- Second class county port authorities
- Nonpublic, nonprofit K–12 schools
Farmers can claim reimbursement for fuel used in qualifying agricultural operations, and operators of truck-mounted refrigeration units can also recover tax on fuel consumed by those units. These aren’t exemptions at the pump. You pay first, then apply for a refund through the Department of Revenue.6Pennsylvania Department of Revenue. Motor Fuels Tax
Diesel and Alternative Fuels
Diesel is taxed at a higher OCFT rate than gasoline: 74.1 cents per gallon in 2026, plus the same 1.7-cent liquid fuels tax. That is roughly a 16-cent premium over the gasoline rate before federal tax.1Pennsylvania Department of Revenue. Motor Fuel Tax Rates
Pennsylvania also taxes alternative fuels used for transportation. The 2026 rates:
- Compressed natural gas (CNG): 57.6 cents per gasoline gallon equivalent
- Liquefied natural gas (LNG): 64.8 cents per diesel gallon equivalent
- Electricity: 1.72 cents per kilowatt-hour at public charging stations where the tax can be collected
These are set annually alongside the gasoline and diesel rates.7Pennsylvania Department of Revenue. Alternative Fuels Tax Rates
What EV Drivers Pay Instead
Battery-electric vehicles don’t burn gasoline and contribute nothing through the fuel tax. To close that gap, Pennsylvania imposes a separate road user charge on battery-electric and plug-in hybrid vehicles. For 2026 the annual fees are:8Pennsylvania Department of Motor Vehicles. Road User Charge for Electric and Plug-In Hybrid Vehicles
- Battery-electric vehicles: $250 per year, or $500 for a two-year registration
- Plug-in hybrids: $63 per year, or $126 for two years
The plug-in hybrid fee is set at 25% of the EV rate, reflecting that hybrids still buy some gasoline and pay fuel tax on those gallons. The charge is collected at registration, so it appears alongside normal registration fees when you register an EV. The revenue goes into the same Motor License Fund that receives gasoline tax proceeds.