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Experts are torn on when or even if drivers might see significant 'demand destruction' — an economics term for a sustained decline in demand for a product due to excessively high prices — at the pumps.
Analysts say we’re not seeing drop in demand yet even though prices hovering around all-time highs
The reason that pump prices in this country aren’t yet reflecting a reduction in demand, Muralidharan said, is that U.S. driver demand is still so high. Because North American fuel refiners have the option to sell into either the Canadian or U.S. markets, as long as demand remains high south of the border, fuel prices in this country will remain elevated.
In theory, reaching an unsustainable price would serve as a tipping point and ultimately cause fuel prices to fall, finally offering drivers some relief. But analysts say we're not there yet even though gas prices are hovering around all-time highs.
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