Fuel prices in North County smashed previous records for the 15th week out of the last 17, and some business owners said diesel's eye-popping high had cut into their profits and left them little room to avoid price increases.

Regular gasoline in the area rose 15 cents from last week to an average of $4.16 a gallon on Thursday, according to the a weekly survey by the San Diego-based Utility Consumers' Action Network. Diesel rose 18 cents to $5.11.

Diesel is produced from crude oil in the same refining process that also produces gasoline, almost as a by-product. It's heavier and can burn less cleanly, but it can also be refined further into gasoline at times when gas is fetching a significantly higher price.

Diesel had been cheaper than gas in most recent years, and as recently as last June, but its price in North County has risen 65 percent since then, compared to an increase of just 34 percent for gasoline. Those parallel increases in other parts of the country; the national average price of diesel rose to $4.79 a gallon Thursday; regular gas rose to $3.95.

Diesel's steeper rise follows surging demand worldwide, particularly in Europe, where roughly half of all new passenger cars are made with diesel engines, said Severin Borenstein, director of the University of California Energy Institute in Berkeley. And oil companies are refining diesel at close to their capacity, a contrast with gasoline refining, where the main constraint is the price of oil, Borenstein said.

"Refineries have not been doing terribly well in refining to make gasoline," Borenstein said. "On the other hand, refiners' margin on diesel is sky-high. There's a lot of demand for diesel chasing a relatively restricted ability to produce."

California drivers have cut back in response to the higher prices. That's showing up in statewide data on gasoline sales, on carpooling Web sites and on car-dealer lots, where sales of large sport-utility vehicles have fallen dramatically.

But it's much more difficult for diesel users -- which tend to be businesses -- to cut back, a representative for gasoline retailers said. As a result, he said, refiners can raise prices much more easily.

"When you raise the price of gas, people can cut back, and the oil companies know it," said Tim Hamilton, executive director of McCleary, Wash.-based Automotive United Trades Organization, an association of independent and franchised gasoline stations. "The diesel customers can't back off. The reaction to higher diesel prices is the unemployment line."

Worldwide crude oil prices flirted with record highs above $130 earlier in the week before falling back to close at $126.80 on the New York Mercantile Exchange Thursday. Refiners' margin per gallon fell to a range of 23 to 40 cents this week from about $1 this time last year. Those margin include both profit and costs.

In Washington, meanwhile, the Commodity Futures Trading Commission revealed that it is six months into a wide-ranging investigation of U.S. oil markets, with a focus on possible price manipulation.

The CFTC said it started the probe in December and was publicizing the investigation "because of today's unprecedented market conditions."

Some analysts have pointed to hedge funds and pension funds as playing a role in bidding up oil futures prices. Investors have also used contracts this year as a hedge against the weak U.S. dollar.

The higher diesel prices have eaten into the profits of North County businesses, and particularly those in the transportation industry.

Sullivan Moving & Storage, which has locations in Vista, Clairemont Mesa and Phoenix, Ariz., has been able to stay profitable only by focusing on its storage and logistics businesses, said Mark Keiper, the company's executive vice president.

Sullivan's moving business, which used to account for 70 percent of its revenue, has been hammered by the weak real estate market and now by the price of diesel. It increased its hourly moving rate from $93 to $95 last year, and to $97 earlier this year.

George Whalin, a Carlsbad retail analyst, said larger price increases are beginning to show up in the costs of necessities, such as food. In contrast, Keiper said, his company can't raise prices much higher because the moving market is so slow.

"It's a challenging time for us all," Keiper said. "It's very competitive right now because nobody has enough business."

The Associated Press contributed to this article. Contact staff writer Chris Bagley at (760) 740-5444 or cbagley@nctimes.com.