The U.S. Department of Energy's short-term energy outlook, released Tuesday, has once again boosted its energy price forecast. Diesel fuel, DOE say, will average $3.40 per gallon for 2011, and $3.52 for 2012.

The forecast price is up 17 cents from last month and up 41 cents from last year's mid-January prediction.

Rising crude oil prices are the primary reason for higher retail prices, but higher gasoline and distillate refining margins are also expected to contribute to higher retail prices, DOE says.

The Energy information Agency expects the price of West Texas Intermediate crude oil to average about $93 per barrel in 2011, $14 higher than the average price last year. For 2012, EIA expects WTI prices to continue to rise, with a forecast average price of $99 per barrel in the fourth quarter 2012.

Regular-grade gasoline retail prices will average $3.17 per gallon this year, 39 cents per gallon higher than last year, and $3.29 per gallon in 2012, with prices forecast to average about 5 cents per gallon higher in each year during the April through September peak driving season.

There is regional variation in the forecast, with average expected prices on the West Coast about 25 cents per gallon above the national average during the April through September period.

The EIA claims there is more than a 25 percent probability that the national average retail price for regular gasoline could exceed $3.50 per gallon in the June through September period in 2011 and an 8 to 10 percent probability that it could exceed $4.00 per gallon in August and September 2011.

To see details of this forecast update, go to www.eia.doe.gov