The peg price, explained
The base price and MPG divisor behind every DOE-indexed fuel surcharge
- The peg (base) price is the diesel price at which a fuel surcharge equals zero — the contract's reference point, not a government number.
- Common pegs: $1.20 (the legacy standard) and $1.25 (the base DAT RateView calls the most common benchmark); real contracts range roughly $1.10–$1.50.
- Standard MPG divisors: 6 van · 5.5 reefer · 5 flatbed (empty miles included).
- Rule of thumb at 6 MPG: the surcharge moves about 1¢ per mile for every 6¢ per gallon the DOE index moves.
- At this week's index ($5.134, week of ): a $1.20 peg at 6 MPG gives $0.656/mile; a $1.25 peg gives $0.647/mile.
Every DOE-indexed fuel-surcharge schedule is three numbers: the weekly DOE diesel price, a peg, and an MPG divisor:
The peg dates from an era of much cheaper fuel — $1.20 was roughly the price of diesel when many legacy schedules were written — and it never moved with the market because both sides price around it: a low peg shifts more of the rate into the surcharge line, a high peg leaves more in the line-haul. Neither is “right”; they are different splits of the same total. What matters in practice is knowing exactly which peg, divisor, and update day your rate confirmation names, because a nickel of peg is worth almost a penny a mile every mile of the contract.
The surcharge typically applies from Wednesday through the following Tuesday, tracking the weekly release — but the effective window, like everything else here, is a contract term.
Run your own numbers with this week's index pre-filled in the FSC calculator, or print a bracket table from any peg with the FSC matrix.
FAQ
What is the peg price in a fuel surcharge?
The peg (or base) price is the diesel price at which the fuel surcharge is zero. When the weekly DOE index is above the peg, the difference — divided by an agreed truck MPG — becomes the per-mile surcharge. The peg is a contract term, not a regulation: common values run from about $1.10 to $1.50 per gallon, with $1.20 the classic legacy base and $1.25 the benchmark DAT's RateView describes as most common.
What MPG is used in fuel surcharge calculations?
6.0 MPG is the usual default for dry vans, with 5.5 for reefers and 5.0 for flatbeds — figures that include empty miles, which is why they sit below what a modern tractor scores loaded. Like the peg, the divisor is whatever the contract says.
Why does a lower peg price mean a higher surcharge?
The surcharge covers the gap between today's diesel and the peg. A $1.20 peg makes that gap 5 cents wider than a $1.25 peg, which at 6 MPG adds about 0.8 cents per mile to the surcharge. Same freight, same fuel — the peg just moves money between the line-haul rate and the surcharge line.
Do LTL carriers use a peg price?
Mostly no. Less-than-truckload carriers typically publish a fuel surcharge as a percentage of the line-haul charge, keyed to DOE index brackets in a public table, rather than a cents-per-mile formula with a peg.