North Carolina Suspends 41-Cent Gasoline Tax
North Carolina drivers could see lower fuel costs after Democratic Gov. Josh Stein signed a bipartisan bill temporarily suspending the state’s 41-cent-per-gallon motor fuel tax.
The tax holiday took effect Saturday, October 10, and runs through November 30. House Bill 3, called the “Relief at the Pump” Act, suspends taxes on gasoline, diesel and certain alternative fuels as households face rising energy costs.
The Republican-controlled General Assembly approved the measure with overwhelming support. The House voted 111-1, with Democratic Rep. Pricey Harrison of Guilford County casting the lone “no” vote. The Senate passed it unanimously, 41-0.
Stein signed the bill Friday at an event in Buncombe County, saying families need help with rising costs.
“Rising grocery, utility, and gas prices are making the costs too high for people across our state,” Stein said.
“I am signing this bill to keep more money in people’s wallets, but this temporary relief is just one step.”
The governor also urged lawmakers to consider further measures to address the cost of living.
Drivers may not see the full 41-cent tax reduction right away. Gas stations generally buy fuel with taxes already included in the wholesale price, and the new law allows retailers to sell existing inventory without immediately lowering prices. As stations restock with untaxed fuel, however, they must pass the tax savings on to customers.
House Speaker Destin Hall said motorists could ultimately save closer to 30 cents per gallon, based on other states’ experience with temporary fuel tax suspensions. That would amount to about $4.50 on a 15-gallon fill-up. Savings for frequent drivers, commuters and commercial operators could add up over the seven-week period, though the final price will also depend on wholesale costs, inventory and other market conditions.
AAA figures reported Friday put North Carolina’s average regular-gas price at about $4.09 per gallon, roughly $1.21 higher than at the same time in 2025. The national average was about $4.37. Rising global energy prices and disruptions connected to conflicts involving Iran and Russia have contributed to higher costs.
Republican legislative leaders credited conservative budgeting and state reserves with making the suspension possible.
“Years of responsible budgeting have put North Carolina in a position to provide meaningful relief when families need it most,” Hall said.
He described the tax suspension as another effort by House Republicans to make the state more affordable. House Majority Leader Brenden Jones, who helped lead the bill, also called it an important step toward reducing everyday expenses.
The state expects the suspension to reduce motor fuel tax collections by approximately $362.3 million. Those revenues normally support highway construction, road maintenance and other transportation projects. To replace the lost funds, the law directs a transfer from the state’s Inflation Reserve and protects funding for the Department of Environmental Quality.
Supporters say the arrangement will provide relief at the pump without forcing delays to transportation projects. The bill also extends certain exemptions for red-dyed diesel fuel through December 31, a provision intended to help farmers and other eligible businesses manage fuel costs.
With the November 3 midterms approaching, fuel prices remain a major political issue. The temporary tax cut gives North Carolina drivers some relief while lawmakers continue to debate broader household costs.