According to the Australian Competition and Consumer Commission, the average daily retail diesel price in the five largest capital cities has risen by more than 17pc in 2008, from 148.7 cents per litre to 174.7c/l.

And the increase in the price of diesel in 2008 has been greater than the increase in the price of unleaded petrol, which have about 12c/l on average in the five largest capital cities this year.

ACCC commissioner, Pat Walker, says the prices are being monitored closely, but the substantial increase in diesel prices in Australia reflects sharp increases in the international benchmark for diesel prices (the Singapore Gas Oil with 50 parts per million sulphur content).

According to ACCC figures, in 2008 the international benchmark for diesel prices has increased by about 40pc in Australian dollars.

But the ACCC says there have been a number of other factors for the most recent increase in the benchmark price of diesel.

It says the devastating earthquake in China has damaged power infrastructure and constrained coal transportation.

As a result, there has been an increasing demand on diesel to generate electricity.

In addition, China has been increasing its stockpiles of diesel ahead of the Olympic Games.

In recent years, there has also been a greater demand by global refineries for processing diesel, especially diesel refined from low sulphur crude oil.

Such crude oil is generally easier and less costly to distil into transport fuels such as diesel.

In February the Assistant Treasurer and Minister for Competition and Consumer Affairs, Chris Bowen, asked the ACCC "commence a renewed focus on LPG and diesel prices".

"Consumers have been concerned about the increased price of diesel and we are monitoring international benchmark prices and retail price movements on a daily basis across capital cities and country towns," Mr Walker said.