The price of diesel is closely tied to the demand for regular gas. Because it is a byproduct in crude oil refining you can think of it as 1 gallon of diesel is produced for every 100 gallons of regular fuel (I'm making up numbers here). When demand for regular gas is low less is produced to help stabilize the supply. When less regular gas is produced less diesel is produced. The problem is that demand for regular gas and demand for diesel are not tied to each other. Drivers can take the train, bus or carpool, but truckers can't haul their load on the subway. This leaves the same demand for diesel except there is less of it to go around and therefore price increases as the supply decreases.

The FTC site also explains that US refining technologies are changing so that we are still paying off their initial expenses.  Either we use the old methods where diesel is a byproduct of crude refining, or we use the new method which is more expensive because it is newer.  We pay more either way.

Historically, the average price of diesel fuel used in motor vehicles has been lower than the price of regular gasoline. However, this is not always the case. In some winters where the demand for distillate heating oil is high, the price of diesel fuel has risen above the gasoline price. Since September 2004, the price of diesel fuel has been generally higher than the price of regular gasoline all year round for several reasons:

* High worldwide demand for diesel fuel and other distillate fuel oils, especially in Europe, China and the U.S. and a tight global refining capacity available to meet demand.
* The transition to low-sulfur diesel fuel in the U.S., which is affecting diesel fuel production and distribution costs.
* The Federal excise tax on diesel fuel is 6 cents per gallon higher (at 24.4 cents/gallon) than the tax on gasoline.

It is not a byproduct of regular gas. Oil can be used to produce either gas or diesel with different processes. The prices in the US are regulated by "the market" which means the oil companies charge what the market will bear. Also, there is a shortage of diesel refining capacity in the US. In Europe the governments made a point of encouraging diesel in order to reduce their crude oil imports. The US never did that.

They don't especially in CA the EPA requires a stricter regulation on fuel verses the rest of the US