By STEVE EIGHINGER
Herald-Whig Staff Writer

Gas prices in Quincy have fallen to the $2 mark for the first time in about 25 months, a stark contrast to the record $4.21 city residents were paying in mid-July. The record price for diesel was $4.90 in late July.

Prices at the pump are even cheaper across the Mississippi River. Missouri has the nation's lowest average per gallon numbers at $1.79, according to the www.fuelgaugereport.com and www.gasbuddy.com Web sites. Gas in West Quincy, Mo., was selling for $1.89 on Monday.

Illinois ranks 26th with a $2.09 average per gallon of gasoline. Diesel is averaging $3.10.

Gas seems to be running cheaper in the eastern portion of the state, with Decatur checking in at $1.71, Champaign-Urbana at $1.82 and Bloomington-Normal at $1.91. Prices in the north and west are considerably higher, led by the Quad Cities ($2.19), Rockford ($2.14) and Chicago ($2.27).

Michael Gully has not been able to enjoy the drop in gasoline prices as much as the average consumer.

Gully, vice president of Quincy-based Gully Transportation, helps oversee a fleet of 225 trucks that services the Midwest. For the trucking industry and those businesses that rely on it as a pipeline, the economic relief has not been as pronounced.

"It's a double-edged sword," Gully said.

While gasoline has plummeted in recent weeks, the price of diesel, which fuels the trucking industry, has not kept pace.

Diesel is still running about $1 more per gallon than gasoline, and for Gully that price is coupled with surcharges that fluctuate from customer to customer based on individual contracts.

Gully said he hears questions from customers wondering why transportation costs have not followed the same kind of decline as the price of gasoline. In turn, those businesses have been unable to noticeably reduce many of their day-to-day shelf prices.

"I don't understand it, because it costs less to make diesel than gasoline," Gully said of the wider-than-expected disparity between gasoline and diesel.

Some are uncertain what way the market will swing next, especially with the Organization of the Petroleum Exporting Countries (OPEC) cartel meeting again next month to discuss more cutbacks in daily production.

"This is unprecedented territory. I have never seen anything like this," said Michael Right, vice president of public affairs for St. Louis AAA, who tracks costs in Missouri, southern Illinois, Kentucky, Mississippi and Louisiana. "I suspect as long as crude is selling for what it is, we'll enjoy relatively low gasoline prices."

The price of crude oil on the world market has dropped roughly $90 per barrel since mid-summer, falling from around $147 per barrel to $60 per barrel.

The U.S. Department of Energy reports demand for gasoline has fallen in 38 of the past 42 weeks. U.S. consumer usage is down 10 percent in the last year.

The U.S. Department of Transportation reports the dropoff in number of miles driven from 2007 to 2008 is the highest percentage in the 66 years the agency has tracked such matters.

Some feel those items are two more telltale signs of a lack of consumer confidence in the economy as a whole, despite the plunge at the pump.

Gully said freight business is especially slow in some of his company's key markets. He said areas he would normally have trouble finding enough trucks to serve are experiencing a major economic downturn and no longer need the same amount of goods. Industrial states like Ohio and Michigan have been hammered by the economic climate, and even Chicago, which Gully says has been immune in the past, is feeling the sting.

"We are in a deeper recession than most people realize, and I don't think the first six months (of 2009) look very good," he said.

Darrell Wilson, an assistant manager of the Hy-Vee Food Store at 1400 Harrison, said while people have gained a break from lower gas prices they are not necessarily spending that money at the supermarket.

"There is no definite turnaround right now," he said. "Maybe (consumers) are trying to catch up on some of the bills they had to neglect (during the higher gas prices)."

Wilson also said the Hy-Vee fuel station at 12th and Harrison has not seen an increase in business, despite the lower prices.

"We are pumping about the same amount of gallons," he said.

Shane Barnes, director of transportation for Quincy public Schools, is one individual who showed legitimate optimism in relation to the lower fuel prices. Even though "85 to 90 percent" of the district's 85 buses are diesel-powered, the savings should be substantial enough to allow the transportation budget to finish in the black.

"We budgeted about $4 a gallon for fuel, so these prices are definitely helping," Barnes said.

The district's buses will cover more than 900,000 miles during the school year.

Another entity enjoying somewhat of a reprieve are automotive dealers. Hess Auto Agency salesman Wayne Howe says business has been on the upswing in recent weeks at the downtown dealership.

"Oh, I'm sure gas prices have had something to do with it," How said. "Everyone who comes in asks about gas mileage on the (vehicles) they are looking at. That's everyone's question."

-- seighinger@whig.com/221-3377