High Gas Prices Could Be Creating Demand Destruction

What is demand destruction?

In economics, demand destruction refers to a permanent or sustained decline in the demand for a certain good in response to persistent high prices or limited supply. Because of persistent high prices, consumers may decide it is not worth purchasing as much of that good, or seek out alternatives as substitutes.


Gas prices have soared so high that the US is now seeing demand destruction ahead of the summer driving season

Pain at the pump has gotten so bad that demand for gasoline is dropping just as the summer driving season is about to begin.

Demand on a four-week rolling basis has hit its lowest level during this time of year since 2013, excluding the pandemic-outbreak period in 2020, according to data from the Energy Information Administration compiled by Bloomberg. Compared with year-ago levels, demand is down roughly 5%.

Prices at gas stations across the US have hit record after record over the past two weeks, dashing some hopes for a driving season that approaches pre-COVID-19 levels, AAA previously predicted.

The average gallon of gas in the US hit $4.59 on Tuesday, about 51% higher than a year ago, according to AAA data. Regular gas prices have never hit this level. And in California, AAA data showed, prices can be over $6.

And prices are expected to go even higher by the end of the summer. One question, though, is where is this demand destruction occurring? And how strong is it? What you’ll probably see is fewer trips places. Perhaps more staycations, fewer weekend trips somewhere. What happens if shippers start having fewer trips? Oh, and demand destruction in the petroleum sector could lead to a massive worldwide recession or even a depression.

Is this intentional, to get people off of fossil fuels? How many people will lose their jobs? Oh, and this could seriously drive up the cost of lithium and other metals needed to create hybrids and EVs, as demand could outstrip supply. Citizens will notice when they have to change their habits, and, they quite often respond by getting rid of the people in political power.

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6 Responses to “High Gas Prices Could Be Creating Demand Destruction”

  1. Facts Matter says:

    What is the major problem with high gasoline prices NOW, that the NAZI’S fail to grasp, is that it is coupled with double-digit inflation.

    In other words, most Families could absorb high gas prices if everything remained static.

    In 2007-2008 it became very evident that gasoline prices were a major concern but the economy was already rolling into a major recession while inflation remained at about 2 percent. The AGW NAZI’S learned a valuable lesson from 2008.(DAVOS SWITZERLAND NAZI’S)

    High gasoline prices ALONE will not create a green planet. They must couple that with GREEN SOCIAL SCORES, A NEW WORLD ORDER, RIGHT THINK, and higher than normal food and necessities creating an overwhelming squeeze at the pump and driving people to stop using Fossil Fuels. One must remember that the members of this new world order are not oil-producing CZARS, so they win if oil loses.

    Combine that with a government that will not drill for more oil. A FED that just prints money willy-nilly to keep the economy running and now you have created the perfect storm.

    The world is crashing. The world is racing toward Famine Status. The world will soon begin engaging in battles over food. The Russians are blocking the harbors of Ukraine that can deliver wheat to the world which means soon it will be incumbent upon the world to begin sinking Russian Ships so the world can eat.

  2. Professor Hale says:

    How many people will lose their jobs?

    Such oldthink. No one needs a job. The government can just send them a check

  3. Hairy says:

    Unemoyment is quote low. Emoers can’t find workers but you worry about job losses? Is that a realistic. Fear thst you have?
    Domestic oil production is significantly higher now than Dec 2020 prepandemic Trump. Yet gas prices then were 2.15 then.

    However the world market price(which is what Americans must pay) is twice as much.
    Should the USA stop exporting 100 million gal of refined oil each day? Supply and demand???
    Or should we continue to let oil companies price gouge us?

  4. Hairy says:

    Since the price is controlled by the producers who are earning record profits, why/how does your paranoia ,Teach, enable you to think thst it is the lefty greenie commies who are doing this price gouging solely to force us into expensive EVs??????
    I realky can’t see that
    And as far as gas “prices” yes CA is highest
    However their per capita gas expenditures are not the highest. They are in the top 10. But because Cali people tend to drive newer model year cars and since 70% of cars in Cali are fuel efficient foreign cars they don’t have to spend as much on gasoline as other states. The people hurting most are in poorer red states

    • Ultra MAGA says:

      Hairy, always the elitist had to sneak in the insult about “poorer red states” . Can’t give us average working folks an even break can ya Hairy? Even though we supply all your food. Pointing out that the people in blue states are stealing our wealth is not a smart move for commies. As we get poorer under the biden junta, those blue state Silicon Valley/Hollywood/Wall Street pigs steal our country’s wealth. They even double their wealth while in the midst of a Covid epidemic they close our businesses and unemploy our people.

      Again, the illegal biden junta does not set gas prices NEITHER DOES CITGO. The market does just like everything else. Believe it or not. But when a major player like the U.S. slows down or stops producing and uses it’s power to stop sales it certainly signals a production and supply shortage. Now a shortage means less product and as you learned (?) in school less product forces prices higher. Ya think.

      The bidien junta did not raise oil or gas prices but they were and continue to be instrumental in the real or perceived shortages and increased prices.

      Stop whining and buy the EV you’ve been hawking for Elon for the past five years.

  5. UnkleC says:

    Ultra Maga, you are quite correct that The Market sets gas [and diesel, and jet] prices. In the past, I have posted plenty of references on the oil market. Anyone with a computer and Google can easily find more information on the oil market than they probably need. Additionally, it’s not just a few large companies, much of the industry is composed of smaller companies taking risks on their own.
    Some of the lefties don’t like to be confused with reality.

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