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December 20, 2005 9:00 AM, EST

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he North Carolina Department of Revenue said a 2.8-cent a gallon increase in the state’s motor fuel tax will take effect Jan. 1.

The 10% increase, the largest in 16 years, will raise the tax on both diesel fuel and gasoline to 29.9 cents per gallon, from the current 27.1 cents.

The hike is part of a state law that requires the department to review the motor fuel tax twice a year, Reggie Little, assistant director of the agency’s motor fuels tax division, told Transport Topics.

The increase is in effect a result of the higher fuel prices in September and October caused by Hurricane Katrina, which destroyed Gulf of Mexico oil platforms and led to refinery closures, Little said.