The average U.S. retail price of unleaded regular gasoline fell sharply last week, dropping more than 12 cents to $2.60 a gallon, the Energy Information Administration (search) said Monday.

The national pump price has tumbled some 32 cents in the past three weeks, but still remains 57 cents a gallon higher than one year ago, according to the EIA's weekly survey of U.S. service stations.

The drop reflects falling crude oil prices and a decline in gasoline demand as American motorists balked at paying record high prices in September after two hurricanes disrupted supplies.

U.S. crude oil futures ended at $60.32 a barrel Monday, down more than $10 from a peak in late August.

However, diesel fuel prices paid at retail stations rose by nearly a penny to an average $3.16 per gallon, according to the weekly EIA survey. The price remains 95 cents a gallon higher than one year ago.

Energy industry analysts are closely watching oil data to assess if the downturn in use is temporary or represents "demand destruction," in which high prices trigger longer-lasting changes in oil use by consumers and businesses. The American Petroleum Institute (search) said last week that sharply higher prices in September cut U.S. gasoline demand by nearly 4 percent.