Diesel Projected to Average $2.79 This Summer

June 7, 2006 10:30 AM, EDT

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etail diesel fuel prices this summer are expected to average $2.79 a gallon, 38 cents higher than last year, the Energy Department said.

Gasoline prices will average $2.76 a gallon, 39 cents higher than last year’s average, DOE’s Energy Information Administration said in its monthly Short-Term Energy forecast, issued late Tuesday.

The gasoline forecast is an update from last month’s $2.71 price outlook for the summer, while diesel fuel was previously projected to average $2.70 for the full year. (Click here for previous coverage.)

Diesel’s most recent retail average national price, as measured by DOE’s weekly survey, was $2.89 a gallon on Monday, up 0.8 cent from last week. (Click here for previous coverage.)

Transportation diesel fuel consumption is projected to show “solid growth in 2006 and 2007 of 3.4% per year as the economy continues to expand,” EIA said.

But unusually warm weather during the first quarter resulted in a substantial decline in heating oil demand, which will limit total distillate consumption growth for all of 2006, it reported. Heating oil and diesel fuel are both distillates.