I've eliminated one 70 mile RT drive pet week. While demand for gas is relatively inelastic, it may not be as inelastic as some may think, especially if there is a large increase in price over a short period of time. The elasticity curve is not a straight line.
Actually, gasoline tends to be sluggishly elastic. Demand DOES change, it just changes slowly. And similarly with supply. People can reduce a certain amount of gasoline consumption quickly -- avoiding unnecessary trips, walking (very) short distances, combining trips, carpooling, etc.. But the physical construction of our cities demands a commute. Cities these days are largely suburbs. Without a commute, we don't do business. And that's not a parameter that's easily or quickly modifiable.
Same with gas-miserly cars. Sure, given time the automakers can retool and start cranking out econoboxes again. But that takes years and a sustained demand for them before the manufacturers are willing to take the risk.
On the supply side, it takes years to drill new wells and build new refineries, to say nothing of developing alternate fuel technologies such as shale extraction or polymerization.
The money is made in the short haul, where the supply/demand curve goes grossly out of whack for a brief period of time because of some disaster (real or invented). In this last round of gouging, supply went short overnight, and the speculators and profiteers jumped on futures, which drove the price through the roof. The gougers made their money -- driven by hysteria they themselves helped create -- then bailed before the bottom fell out.
Classic amoral capitalism.