Proton, Perodua slash prices

This is the headline of today's New Straits Times. Wonder whether this is one of the government's strategy to reduce the impact of fuel hike on the automobile industry. As we learnt in economics, Cars and Petrols are complement goods. An increase of price in petrol would definitely cause the demand of cars to fall. The government is trying to neutralize the impact right now, though the outcome is still unpredictable.

I receieved a mail from a friend a few days ago regarding the history of petrol price in Malaysia.

before 1990 - RM 0.89
year 1990 - RM 1.10 (increment of RM 0.21)
01/10/2000 - RM 1.20 (increment of RM0.10)
20/10/2001 - RM 1.30 (increment of RM 0.10)
01/05/2002 - RM 1.32 (increment of RM 0.02)
31/10/2002 - RM 1.33 (increment of RM 0.01)
01/03/2003 - RM 1.35 (increment of RM 0.02)
01/05/2004 - RM 1.37 (increment of RM 0.02)
01/10/2004 - RM 1.42 (increment of RM 0.05)
05/05/2005 - RM 1.52 (increment of RM 0.10)
31/07/2005 - RM 1.62 (increment of RM 0.10)
28/02/2006 - RM 1.92 (increment of RM 0.30)

Everytime when government increse the fuel price, they will say, "Don't worry, our price is still the cheapest in this region."

Right now, the car prices are dropping by 3 to 5%. It should be a good news to us. But please let me say something.

"Don't worry, ours is still the most expensive in the region!"