Let me give your readers an example of myself being affected by price distortions (fuel subsidies + import tax/duties on cars).
I bought my car at say RM150,000 (Ford Escape 2.0L) or US$39,000. The same car in the US would cost US$22,000 (or RM75,000+ in Malaysia under free trade).
I am thus paying RM75,000 more for buying the car in Malaysia due to local import taxes, etc. Not only that, when financing for this additional RM75,000 at 4% over 5-7 years, I am in fact paying an additional RM15-20,000.
So I am paying a total of an extra RM90-95,000 for my car (equivalent to an extra RM1,500 a month in monthly loan repayments.
With the fuel subsidies until the recent hike in petrol prices, prices were RM1.52/litre and I was paying RM300 a month for my fuel consumption. At non-subsidised Indian prices of Rs40/ltr or RM3.33/ltr, I would be paying RM600 a month instead, or RM300 more.
So I certainly don't mind if they completely abolish the fuel subsidy as long as they also remove import duties, etc. I will still gain a net of (RM1,500 minus RM300) RM 1,200 a month!
Our per capita income levels just cannot take the load of propping up Proton and simultaneously pay for the high prices of unsubsidised fuel. I think its high time this government comes to its senses!