A new U.S. Energy Department forecast is calling for far less expensive diesel prices in the new year.

On-highway retail diesel are projected to average $3.07 per gallon in 2015, compared to this year’s expected average of $3.82 and 2013’s average of $3.92. The forecast for next year is 31 cents per gallon less than expectations a month ago, according to the DOE's Short Term Energy Outlook.

The fuel is expected to average $3.05 for the first quarter of 2015, falling to $2.98 in the second quarter before rising slowly with a fourth quarter 2015 average of $3.17.

The average price for diesel fuel this week, according to the department is $3.535, down from a high for this year for the year of $4.021 hit in March.

U.S. regular gasoline retail prices are projected to continue declining for the remainder of the year, averaging $2.61 per gallon in December. The DOE expects prices, which averaged $3.51 in 2013, to average $3.37 in 2014 and $2.60 in 2015.

The new 2015 forecast is 35 cents lower than one a month earlier while these prices compares to national average this week of $2.679.

The DOE is expecting lower fuel prices is due to a 40% falloff in the price of oil since peaking in June. On Wednesday crude in New York trading closed at a new-five year low of $60.95 per barrel with Iran's oil minister saying on Tuesday he could see the price falling to as low as $40 per barrel.

This comes as the OPEC oil cartel has seen oil demand at is lowest level in 12 years yet recently decided to keep production levels unchanged while U.S. production of crude oil has been increasing, all leading to a worldwide glut of oil as some overseas economies are slowing.