tom2987

'Demand Destruction' and Gasoline Prices

Yank,
For all of User's typos, he's right. US's demand is down 1.7 percent according to MasterCard (who I have much more faith in than gov stat), and not the 0.7% you state. Keep in mind those stats are from May and do not take into consideration the most recent substantial increases at the pump. Also please consider it was over memorial day. Because so much more gasoline is used in summer, a 1% drop in summer impacts the entire year up to 5%.

For India, you say it's only 10% which won’t equate to demand destruction. I think the Indians would disagree as they are currently protesting as a result of the increase.. Actually, to put a real number to that 10%, it's actually “only” 13 cents for gas and 8 cents for diesel. But to the 300 million of India's 1.1 billion people live on less then a dollar a day, and the millions of others live on the state-set minimum daily wage of $1.60, that is a substantial increase. It would be the equivalent the price of gas in the US going UP $10.68 a gallon overnight. I’m no genius, but I think that might hurt demand.