Which PADD? National vs Regional Fuel Surcharge Index

The national versus regional fuel surcharge index question has a short answer: your contract governs, and if your contract says only “the DOE index,” it has not named an index at all. The EIA publishes eight on-highway diesel series every week, not one. The national average is the usual default and the easiest to defend on irregular-route freight. A regional PADD series is defensible when the carrier genuinely runs inside that region. What is never defensible is a contract that leaves the series unnamed and a carrier that picks.

The spread is not small. For the week ending July 27, 2026, EIA reported a U.S. average of $5.313 per gallon, a Gulf Coast average of $5.087, and a California average of $6.670. That is $1.58 a gallon between two published numbers, both of which a carrier could call “the DOE price” with a straight face.

This is a one-word contract problem with a recurring dollar cost, and it is invisible on the invoice, because the fuel line shows a dollar amount and not the series it came from.

What a PADD is, and why diesel is priced by region

PADD stands for Petroleum Administration for Defense District. The districts date to fuel rationing administration in the 1940s and survived as the standard geography for U.S. petroleum statistics. There are five, and EIA reports on-highway diesel prices for each of them plus the national average plus two sub-series inside PADD 5.

Regional prices differ for reasons that have nothing to do with your freight: refinery concentration, pipeline access, and above all state fuel taxes and fuel specification rules. Remember that the EIA figure is a retail pump price including taxes, captured per EIA’s methodology from Form EIA-888 across 590 outlets as of 8:00 a.m. local Monday. Taxes are in the number, which is most of why California sits where it does.

The eight series, and what each one was worth in the same week

Here is every series EIA published for the week ending July 27, 2026, with the difference from the national average.

Note the structure of that list. The East Coast and Midwest sit within about twelve cents of the national number, so a series mismatch between those and national is a real error but a modest one. The West Coast lines are a different category entirely, and PADD 5 is arithmetically dominated by California. If your contract names PADD 5 and your freight runs Seattle to Portland, you are being billed against a series that California’s tax and fuel-spec regime is pulling upward by more than fifty cents a gallon. The “West Coast less California” series exists precisely for that case, and it is the one to name.

What the series is worth in dollars on one load

Take a 452-mile lane, a $2.50 peg, and a 6.0 MPG divisor. The peg and MPG are illustrative contract terms, not quoted from any carrier. The diesel prices are the real published figures above. The formula is the standard truckload one covered in calculating a truckload fuel surcharge from the DOE index.

Same load, same week, same formula, same peg, a $119 spread between the cheapest and most expensive published series. Nothing in that table is an error. Every row is a correct application of a real EIA number. Which row is right for your invoice is decided entirely by a phrase in a contract.

Run the middle of the table across volume and it stops being trivia. A Gulf Coast lane billed off the national average instead of PADD 3 is $17.02 a load in the carrier’s favor at these numbers. Fifteen loads a week for a year is 780 loads, or roughly $13,300 on a single lane, from one unnamed word.

LTL feels this differently, but it still feels it

On LTL the index feeds a stepped bracket table rather than a per-mile divisor, so a series difference does not translate linearly. It translates into a bracket.

The 22.6-cent gap between the national average and the Gulf Coast is, on a typical table with half-point steps every ten cents, worth roughly a full point of surcharge percentage. On an $850 net linehaul that is about $8.50 a shipment, and it applies to every shipment tendered that week. Sometimes a series difference lands inside the same bracket and costs nothing at all, which is exactly why LTL fuel errors are so easy to miss on a spot check. How the brackets are built and where the boundaries bite is covered in reading an LTL carrier’s fuel surcharge table.

The contract language that actually decides this

Open the fuel surcharge section of your transportation agreement or rate confirmation. You are looking at one or two sentences. Here is what the common phrasings mean in practice.

“The DOE index” or “the DOE national fuel price,” unqualified. This names nothing enforceable. There is no single DOE index. In a dispute you are arguing about intent rather than about arithmetic, and the carrier’s rules tariff will usually fill the gap in the carrier’s favor. Treat this as a contract defect, not as an invoice error.

“The U.S. Department of Energy national average on-highway diesel fuel price.” Clean. This is the U.S. average series, and it is the right default for irregular-route truckload and for any lane set that crosses regions.

“The DOE index for PADD [n].” Also clean, provided the region is one your freight actually moves in. Check the direction of the deal: a carrier proposing a regional index is proposing the region where its costs are, which is not necessarily the region your freight is in.

“The regional index for the region of origin.” Workable, but it needs a tiebreaker. Which region governs a Chicago to Los Angeles load? Origin is a defensible rule, so is destination, so is a blend, and so is national on any interregional move. What matters is that the contract says which. Without a stated rule, every long lane is an argument.

“The applicable regional index.” The worst of the set, because it sounds specific and is not. Applicable per whom?

Silence on the series is a specific type of finding: it does not make any given invoice wrong, it makes every invoice unauditable. Log it in the same place you log a missing effective-date clause, and fix it at renewal.

When a regional index is legitimate

Be fair about this. A regional index is not a trick.

A carrier running a dedicated fleet inside one PADD really does buy fuel at that region’s prices, and asking it to be reimbursed against a national average means the mechanism systematically over- or under-recovers its actual cost. On a dedicated Midwest operation, PADD 2 is the more honest number. West Coast carriers make the same argument for PADD 5, and on intra-California freight, the California series is straightforwardly the right one: California diesel is genuinely what that carrier buys.

The mismatch cases are what to watch for:

• A regional index named on freight that does not run in that region, most often California or PADD 5 applied to lanes nowhere near the West Coast.
• PADD 5 used for Pacific Northwest or Nevada freight where “West Coast less California” is the honest series.
• A regional index selected at contract time when the region was cheap relative to national, without any provision for what happens if the relationship inverts. Regional spreads move.
• A carrier applying its own house convention across all customers regardless of what individual contracts say. This is the most common one, and it is a configuration issue rather than a pricing decision.

That last case matters for how you raise it. Most series mismatches are not somebody at the carrier choosing an expensive index. They are a billing system with one global setting, applied to a contract nobody re-read at implementation.

How to audit a batch of invoices for a series mismatch

This is a month-end-shaped task, and it is worth running once per carrier rather than per invoice.

1. Build the contract register first. One row per carrier, with the index series verbatim from the agreement, the peg, the MPG or bracket table, and the effective-date rule. Do this before you touch a single invoice. If you have six carriers you will likely find three different series and at least one blank.

2. Pull the full weekly series you need, once. The EIA weekly on-highway diesel series gives you every week in one table. Pull national plus whichever PADDs your register names, for the whole audit period, and park it in a lookup tab.

3. Solve for the index, do not just recompute. This is the trick that makes the audit fast. Instead of computing the expected surcharge and comparing, take the billed surcharge and run the formula backwards to find what diesel price would produce it:

implied index = (billed surcharge / miles) x MPG + peg

Then look up that implied price in the weekly table across all series. If it matches the Gulf Coast number for the applicable week, you have your answer in one step, and you know both the week and the series the carrier actually used. Solving backwards separates a series error from a wrong DOE week error, which otherwise look identical on the invoice.

4. Group by carrier, not by invoice. One invoice off by $17 is noise. Every invoice from one carrier off by the same implied series is a setting.

5. Check both sides of a brokered load. If you tender through a broker, the customer-side and carrier-side fuel clauses may name different series, and the gap is invisible in a load-level P&L because both numbers look correct on their own. That comparison runs on the same field-by-field method as any rate confirmation that disagrees with the carrier invoice.

6. Mind the clock before you build the file. There is a limited window to contest a bill, and a year of history may be partly out of reach. Check it against every freight billing deadline that can cost you money before you spend a week reconstructing invoices you can no longer challenge.

What to ask for, and what to write into the next contract

Raise it as a configuration question, because that is usually what it is: “Our agreement specifies the U.S. average series. The implied index on these 40 invoices matches the PADD 5 series for the same weeks. Can you confirm the setting and correct it prospectively?” That request gets fixed. “Your fuel is too high” does not.

Then close the hole in the contract. A fuel clause that cannot be argued about names five things:

1. The publisher and the exact series. “The U.S. Energy Information Administration Weekly Retail On-Highway Diesel Prices, U.S. average” leaves nothing to interpretation.
2. A regional rule with a tiebreaker, if you agree to a regional index at all: which region, and what governs a load that starts in one region and ends in another.
3. The peg, and ideally a sentence recording what diesel price the linehaul assumes.
4. The scale. MPG divisor and mileage basis for truckload; the bracket table by version and effective date for LTL.
5. The effective-date rule, in the words “published,” “preceding,” or “in effect on,” attached to a specific event.

Those five sentences turn the fuel surcharge from a number you accept into a number you can reproduce. The rest of the mechanism, and how the four inputs fit together end to end, is in how fuel surcharges work in trucking.

Sources

• EIA, Gasoline and Diesel Fuel Update (week ending July 27, 2026: U.S. average $5.313, PADD 1 $5.354, PADD 2 $5.196, PADD 3 $5.087, PADD 4 $5.141, PADD 5 $6.067, West Coast less California $5.545, California $6.670, all including taxes)
• EIA, On-Highway Diesel Fuel Price Survey: procedures and methodology (Form EIA-888, 590 retail outlets, cash self-serve pump price including taxes as of 8:00 a.m. local Monday, published around 10:00 a.m. ET Tuesday, PADD plus national and California breakouts)
• EIA, Weekly U.S. No 2 Diesel Retail Prices (weekly on-highway ultra-low-sulfur diesel retail price series)