People in the transport services feel that they are forced to increase the transportation charges in a bid to sustain their business. Everywhere there is likelihood of increase of transportation cost by at least Rs 3,000. Life saving drugs, garments and food grains are brought to the region through trucks. Even inter state movement within the Northeast is supplied through trucks.
According to the estimate of the Kamrup Chamber of Commerce (KCC), Northeast imports Rs 25,000 Crore worth of food grains every year.
More than 1000 trucks come to Guwahati everyday from New Delhi, Haryana and West Bengal and nearly 200 trucks make their way from Assam’s capital to Upper Assam and other areas of the North eastern states. A similar number of trucks leave from Guwahati to other parts of the country everyday.
While a truckload from Delhi to Assam costs nearly Rs 32,000, the similar truckload to Upper Assam will cost Rs 40,000. For Barak valley the fright charge of trucks comes to around 47,000, for Shillong the charge comes to around Rs 37,000, for Nagaland and Manipur the charges will be around Rs 50,000. For Tripura the charges stand at Rs 54,000.
President of Assam Chamber of Inter- state Carrier, R.S Tiwari said after the fuel price hike, truckers will need to charge around Rs 53,000 to Rs 55,000 to move from Guwahati to Nagaland (Dimapur) as opposed to the earlier cost of Rs 50,000.
Assam has railway connectivity but in the other Northeastern states, goods are ferried through trucks. Nearly 66 percent of the essential goods of Assam come through railways while 30 percent comes through roadways. Waterways account for three percent and one percent comes through oilways.
UPA chairperson, Sonia Gandhi during her visit to Assam on June 14 justified the increase in prices of oil and petrol. She also wanted the people to realize the importance of nuclear energy.
Mrs. Gandhi said “With international prices of crude oil soaring, we had no other option but to increase the prices of petrol and diesel. The prices of kerosene have however remained unaffected. In our neighbouring countries, the  prices of fuel are higher than ours,” she said.
Mrs. Gandhi further said, “All the Congress ruled states were asked to keep the prices of fuel under control. When I called up the Assam Chief Minister, Tarun Gogoi about this issue, he promptly said that the needful will be done. During the NDA regime, the international prices of crude oil per barrel was around 30 to 40 U.S dollars but now it is around 130 to 140 U.S dollars per barrel,” she said.
The Assam Government has decided to reduce the sales tax on petrol and diesel by one Rupee per litre to reduce the burden on the people following the decision of the Centre to increase petrol and diesel prices.
Official sources said that the Chief Minister, Tarun Gogoi issued directions to the Finance Department to issue necessary notification in this regard immediately.
Opposition parties allegedthat in the last couple of years, fuel prices have been hiked nearly 12 times. “From Rs 26.41 per litre of petrol and Rs 14.11 per litre of diesel in December 1999 it has gone up to Rs 52.95 and Rs 35.59 per litre.
Assam which is a major petroleum producing state has sales tax of around 25.75 percent on petrol and on diesel it is around 15.05 percent.
Sources in Numaligarh Refinery Limited (NRL) said prior to this announcement, NRL was incurring  loss of Rs 26 per litre of petrol and nearly Rs 16.30 per litre of diesel. NRL has set up 108 retail outlets in the country, a majority of which is in the North East.  The average sale of NRL retail outlets was 256 Kilo Litre per month during the last financial year vis-à-vis estimated industry average of around 140 Kilo Litre per month,” he said.
The retail marketing losses of NRL have been mounting over the  years and based on the current situation, the retail marketing losses for NRL may go up to Rs. 400 to 500 crores , in the financial Year 2008-09. In 2007-08, NRL suffered retail marketing losses of Rs 124 Crores; the loss was Rs 44 Crore in 2006-07.
Similarly, IOCL has two refineries in Assam. About 95 percent of the LPG requirement in Northeast is supplied by IOCL. Sources in IOCL said, “Prior to Rs 50 hike per LPG cylinder, we incurred loss of around 350 per cylinder. The annual LPG requirement of the Northeast is around 2, 60,000 metric tones,” he said.  
Digboi Refinery of IOCL has the capacity of refining only 0.65 million tones per annum. Petroleum products are supplied mainly to the Northeastern part of India primarily through road and by rail wagons.
With a capacity of 1.0 million metric tones per annum, Guwahati Refinery processes crude oil received from the Upper Assam Oil Fields and caters to the requirements of the petroleum products of the North Eastern Region.
The core activities of the Bongaigaon Refinery & Petrochemicals Limited Group Company are refining of crude oil and production of petroleum products. The Company is also engaged in production and marketing of value-added petrochemical.                                                   
The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization made up of twelve oil producing nations.
OPEC’s mission is to coordinate and unify the petroleum policies of member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry.
At an OPEC meet organised in Saudi Arabia recently, Indian Finance Minister Mr. P. Chidambaram suggested crude oil price be regulated by means of fixing a price band. The finance minister making such suggestion is understandable as the country is reeling from the inflation which is at the highest ever in the last 13 years.
In the US where the fuel market is characterized by high intensity of competition and prices of the products reflect that, the pump prices have remained low as compared to not only India but all countries not subsidizing fuels. Taxes levied on diesel and petrol are on an average low in the US; amongst the states Californians pay the highest of about 70 cents and Alaskans the lowest of about 30 cents. Even in other smaller countries where sufficient competition exists and the market decides prices, the prices have remained low. Such competition is absent in India. Purchasing power also makes a difference in the prices; in India within the price of a litre of petrol one can buy many other basic necessities than one can in the US. Therefore Indians in effect pay much more for fuel than the Americans.
In Europe, fuel is taxed at high rates; in some countries at significantly high rates, the crude oil price is passed on to consumers and therefore European consumers pay higher prices than Indians.
Thus in India prices are higher than in the US, much higher than in the oil producing countries, but lower than in Europe.
India is not among the major producers of crude oil. It has to depend on imports of crude oil from other countries. However, the production of oil and as a result the production of its by-products in India has increased in the recent past due to exploration and findings of new oil reserves.
India currently has an estimated quantity of 5.4 billion barrels of oil reserves out of which it produces around 0.8 million barrels per day. At this production state, the oil reserves in India will last for around 29 years. The major oil reserves of the country are situated at
·    Mumbai high (Mumbai)
·    Upper Assam (Assam)
·    Cambay (Gujarat)
·    Krishna-Godavari basin (Andhra Pradesh)
·    Cauvery basin (Tamil Nadu)
·    Nagaland
·    Arunachal Pradesh
The largest crude oil producing oilfield is the Mumbai high field that produces around 260000 barrels per day. Among these production centers, a major share of production i.e. 2/3rd share is bagged by the offshore reserves as compared to onshore reserves. The refining capacity of crude oil in India is over 2.1 million barrels per day. The refining sector in India is held by both public and private sector, public sector being the dominating one.
India is one of the non-OPEC countries much dependent on its imports to fulfill the domestic consumption demand as it has a much lower level of production. India is a developing country and the requirement for the oil as a primary energy constituent from the industries in the country is at its peak. The country has to depend a lot on coal to satisfy its energy needs in the earlier times but the use of crude oil and gas is taking over the dominance of coal with the change in time. Oil and gas contribute to around 45% of the country’s total energy consumption.
India has around 5.4 billion barrels of oil reserves with it and the domestic production has increased in the recent past to reach the 0.8 million barrels per day mark. Regarding the consumption pattern of oil in India, it is the 6th largest consumer country in the world having a consumption of 2.2 million barrels per day. This leaves the country with a huge deficit in the demand-supply scenario and thus 70% of the consumption is met through imports.

Sunaina