Diesel prices

This is not good news but maybe explains some of the pricing.

Diesel prices predicted to rise

Diesel prices are set to rise further this year as world demand increases, without any increase in refining facilities.

The main problems stem from China and India, where increasing numbers of farmers are using diesel to fuel generators on their properties, and there is strong demand from mining and construction.

Analysts also say European vehicle manufacturers are designing much of their emission-reduction technology around diesel, rather than petrol, engines.

Peter Scott from Shell says the boom in Asian economies means the world is using more diesel than ever before.

"There's a lot more demand for crude oil and related products," he said.

"So all sorts of oil products, particularly petrol and diesel, are just being sought after more in the world and, in particular, many people know about the boom in China and Asia where more of these products are being used."

But chief economist with JP Morgan, Stephen Walters says the oil companies could improve the situation by building more refineries.

"The last refinery built in the US was in the 1970s and therefore when there's a problem with bottlenecks like late 2005, we had the hurricane in the US clearly wiped out a lot of the refining capacity, what we saw was a huge shortage of crude oil," he said.

"Therefore the price goes up to $70 a barrel and we saw prices in Australia at the pump go up to $1.40 and yes part of the problem is the refining capacity is just limited."

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