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Back when I was commuting to school at a cost of two gallons a day, I did the math and decided I wouldn't skip class until gas hit $20/gal. However, $10/gal would have been ample to get me to trade the Subaru for a Civic, do 55mph on the throughway, and look really hard for an apartment near college.
So, demand for fuel is totally inelastic in the short term, but actually quite elastic in the long term. Sustained high prices are required to get people to change their behaviour. That's why I'm sad that the current price hike is a speculation-fuelled bubble: demand isn't up, supply isn't down, it's mostly just investors parking their money in commodities.
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