WASHINGTON -- Diesel prices continue their headlong retreat in the U.S., falling 20 cents last week to a national average of $3.088, according to the U.S. Energy Information Administration.

The national average is now 21.5 cents less than it was a year ago. The highest prices were found in the New England region while the lowest average was in the Midwest.

The average price of a gallon of diesel has now fallen $1.676, or 35 percent, since hitting a record high of $4.764 a gallon in mid-July.

However, energy industry experts warn that the lower prices are temporary.

Prices, they note, are falling because of reduced demand and reduced economic activity, not because we have increased supply or increased energy efficiency, said BP Chief Executive Tony Hayward at a conference recently.

Here Canada, prices are also coming down. Newfoundland and remote northern parts of Quebec are seeing average diesel prices around $1.25 a liter -- a stark difference from the highs of over $1.60 in parts of The Rock this past June.

Southern Ontario averages hover at about $1.05, while southern Alberta prices are about the same, despite traditionally being the lowest in the country.

A month-long diesel shortage in Alberta and Saskatchewan is being blamed for the higher prices these last few weeks, although there are now reports that fuel supplies are slowly normalizing.