A new government report is predicting diesel prices will be lower than a previous forecast, due to an expected decline in the price of oil along with other factors.

The U.S. Energy Department’s Short-Term Energy Outlook says after averaging $3.97 per gallon last year, on-highway diesel prices are expected to average $3.90 per gallon this year and $3.80 per gallon in 2014. Both are two cents lower than DOE's previous forecast last month.

Gasoline is predicted to average $3.55 per gallon this year and $3.38 per gallon in 2014, the same as last month’s outlook.

Driving fuel prices lower, the DOE projects, will be a decline in crude oil prices.

West Texas Intermediate crude should average $92 per barrel this year and next year, down nearly a dollar from last month’s forecast. Brent crude is forecast to fall from an average of $112 per barrel seen in 2012 to $108 and $101 dollars per barrel this year and in 2014, respectively, reflecting the increasing U.S. supply from non-OPEC member nations.

By 2014 several pipeline projects from mid-continent to Gulf Cost refineries are expected to be online, reducing the cost of moving oil to refiners, which should be reflected in a drop in oil and fuel prices, the department says.

Also helping to push oil and fuel prices lower is an expected rapid increase in crude oil production over the next two years. U.S. crude production is forecast to exceed oil imports as early as the end of this year, which hasn’t happened since 1995 following total U.S. liquid fuel consumption falling to 18.6 barrels per day last year, from 20.8 million barrels per day in 2005.