Currently here in AZ diesel is also cheaper than regular gas, as for what is going on, well last summer the price of fuel was run up by futures traders/speculation on what the demand would be. Actual supplies and demand was never the issue. This year the futures/speculators are broke and the actual market is running the price. Remember that fuel producers get 26 gallons of gas and 13 gallons of diesel from each barrel of oil. Considering the number of gallons of gas produces each day to meet that demand, there is a lot of diesel on the market. Diesel demand is down due to the slow economy.
Full timing from Washington State