Pennsylvania’s gas tax is so high because a 2013 state law removed a decades-old cap on the wholesale price used to calculate the tax, letting the per-gallon rate climb with fuel prices to pay for one of the largest and most deteriorated road and bridge networks in the country. On top of that, roughly $250 million a year of the resulting revenue is routed to the Pennsylvania State Police instead of infrastructure. As of 2026, drivers pay 57.6 cents per gallon in state taxes on gasoline, the fourth-highest rate in the nation, and 74.1 cents per gallon on diesel.1Department of Revenue | Commonwealth of Pennsylvania. Motor Fuel Tax Rates
A Tax That Rises With Wholesale Prices
Most states charge a flat number of cents per gallon. Pennsylvania doesn’t. The larger of the state’s two fuel taxes, the Oil Company Franchise Tax (OCFT), is tied to the average wholesale price of fuel.2Commonwealth of Pennsylvania. Liquid Fuels and Fuels Use Tax Each year, the Department of Revenue takes the average wholesale price per gallon over the 12 months ending September 30, multiplies it by a set millage rate, and converts the result into a fixed cents-per-gallon figure that applies for the following calendar year. The new rate is announced by December 15 and takes effect January 1.3Commonwealth of Pennsylvania. Motor Fuels Tax
The practical effect is that when wholesale fuel costs rise, next year’s tax rises with them, even though the millage rate hasn’t changed. A state charging a flat 30 cents collects 30 cents whether oil is at $50 or $120 a barrel. Pennsylvania’s rate ratchets up on its own. That is the main reason the state keeps appearing near the top of national rankings whenever fuel prices run hot. A smaller Liquid Fuels Tax and a 1.1-cent underground storage tank fee are collected on top of the OCFT.1Department of Revenue | Commonwealth of Pennsylvania. Motor Fuel Tax Rates
Act 89 of 2013 Removed the Price Cap
The reason the OCFT behaves the way it does today traces to Act 89, a transportation funding law signed by Governor Tom Corbett in 2013. For thirty years before that, the OCFT had been calculated against a wholesale price that was frozen at $1.25 per gallon, even as real wholesale prices climbed to more than double that figure. Pennsylvania was collecting tax on a fictional 1983 price.
Act 89 scrapped a separate 12-cent-per-gallon flat retail tax and lifted the $1.25 cap in stages:
- 2014: cap raised to $1.87 per gallon
- 2015–2016: cap raised to $2.49 per gallon
- 2017 and beyond: cap removed entirely, with the OCFT calculated on the greater of $2.99 per gallon or the actual average wholesale price
By 2017, for the first time in more than three decades, the tax reflected the real market price of fuel. Per-gallon revenue jumped substantially, and that jump is what put Pennsylvania at the top of national rankings. Lawmakers accepted the increase because the state was staring at a transportation repair backlog that existing revenue couldn’t close.
The Infrastructure the Tax Is Supposed to Fund
Pennsylvania has an unusually large and aging transportation system. The state maintains more than 23,000 bridges, roughly 2,800 of which are classified as structurally deficient. By raw count, only Iowa has more structurally deficient bridges. By percentage, about 12 percent of Pennsylvania’s bridges fall into that category, ranking seventh in the country.
The road network is similarly oversized, with about 40,000 miles of state-maintained highways cutting through terrain that goes through punishing freeze-thaw cycles every winter. Keeping that network functional costs more than it would in a state with fewer bridges, milder weather, or a smaller road inventory. Act 89 was designed to generate enough revenue to start working through the backlog.
All state fuel tax revenue flows into the Motor License Fund, a dedicated account used for transportation spending. For fiscal year 2025–26, total fund revenue is projected at roughly $3.08 billion, with about $2.9 billion going to PennDOT for highway, bridge, and local road work.4Commonwealth of Pennsylvania. Motor License Fund Budgetary Comparison Schedule
The State Police Diversion
The second half of the answer to why the tax feels high is where some of that money actually goes. Roughly $250 million a year is transferred from the Motor License Fund to the Pennsylvania State Police. For fiscal year 2025–26, that includes $200 million in general operations plus additional allocations for patrol vehicles and other programs.5Pennsylvania State Police. Appropriations Hearings 2025-26 Budget Request
The official justification is that troopers patrol highways and respond to traffic incidents, so some share of highway revenue arguably belongs to them. Critics in both parties have argued for years that diverting a quarter-billion dollars annually from a fund created for infrastructure leaves roads and bridges short. A prior legislative effort capped the transfer at $802 million and set a plan to cut it 4 percent per year until it reached $500 million. The step-downs haven’t held in practice. A proposed $50 million annual reduction was dropped from the final budget, leaving the full $250 million transfer in place.
That diversion is a central reason the gas tax feels disproportionate to the paving and bridge work drivers see. A meaningful portion of what gets paid at the pump never reaches a pothole.
How Pennsylvania Compares
Among the 50 states, Pennsylvania’s combined state gas tax has settled into the top five. As of early 2026, state gasoline taxes and fees nationwide ran from a low of 9.0 cents per gallon in Alaska to a high of 70.9 cents per gallon in California.6U.S. Energy Information Administration (EIA). Many States Slightly Increased Their Taxes and Fees on Gasoline in the Past Year Pennsylvania’s 57.6 cents sits behind California and Illinois and ahead of most everywhere else. On diesel, the state’s 74.1 cents per gallon is among the highest anywhere in the country.1Department of Revenue | Commonwealth of Pennsylvania. Motor Fuel Tax Rates Neighboring states charge noticeably less, which is why the price difference shows up at gas stations near the borders.
Federal Tax Stacked on Top
The state tax is not the only tax on each gallon. The federal government adds 18.4 cents per gallon on gasoline and 24.4 cents on diesel, rates frozen since October 1993 and not indexed to inflation.6U.S. Energy Information Administration (EIA). Many States Slightly Increased Their Taxes and Fees on Gasoline in the Past Year Combined with state tax, a Pennsylvania driver filling up with regular gasoline in 2026 pays about 76 cents per gallon in total taxes before the cost of the fuel itself. For diesel, the combined figure is roughly 98.5 cents.
What About Electric Vehicles
Drivers who skip the pump entirely don’t escape the system. Pennsylvania charges EV owners a Road User Charge in place of fuel tax. For 2026, that is $250 a year for a fully electric vehicle on a one-year registration, or $500 for a two-year registration. Plug-in hybrids pay $63 or $126 for the same periods. Starting in 2027, the fees adjust annually with the consumer price index.7Commonwealth of Pennsylvania. Road User Charge for Electric and Plug-In Hybrid Vehicles A gasoline car getting 30 mpg and driven 12,000 miles a year generates about $230 in Pennsylvania fuel tax, so the $250 EV charge is in the same range for an average driver and heavier for a low-mileage one.