Demand destruction does not mean what you think it means. It does not mean that people will magically stop wanting cars because petrol is expensive. Rather, it

Demand destruction does not mean what you think it means. It does not mean that people will magically stop wanting cars because petrol is expensive. Rather, it means that because petrol is expensive, 95% of the market will suck it up and pay whatever prices is at the pump, but the poorer and most vulnerable 5% will face a financial crisis (on the personal dimension) because they simply cannot do so. So, they end up loosing their cars, their jobs and a bunch of other side effects. It's all simple microeconomics, allocation of a scarce good goes to the higher bidders. In the short term this mechanism makes prices to self correct. If they rise so much that people cannot afford petrol and there's petrol to be sold, the price will have to go down and find another point of equilibrium. The problem is that markets are rarely linear processes, and there are inherent delays between causes and effects. So signals take a non negligible time to move through the markets, and in practice this causes instability. And if the delays takes long enough, a business or industry can and do erode its own customer base.