Spurred by demand, the average price for diesel fuel is expected to remain higher than that of gasoline through 2006.

That’s according to the monthly Short-Term Energy Outlook report from the U.S. Department of Energy.

The report said that the projected summer average for diesel fuel is at $2.22 per gallon, up about 45 cents from 2004. Gasoline, meanwhile, has a projected average summer price of $2.17 per gallon.

Demand for crude oil worldwide is projected to increase by an average of 2.1 million barrels per day in 2005 and 2006, the report stated. This in spite of a dip in crude oil and fuel prices toward the end of May.

The report said that tight refining and shipping capabilities in the U.S., combined with a volatile political situation in Iraq, are expected to keep oil markets high as traders remain uncertain what the future holds.