Q.1-10.Read the following passage carefully and answer the questions given below it certain words are given in bold to help you locate them while answering some of the questions.
It is a sad irony that when international oil prices are on a downward spiral, India has administered its biggest increase ever in the domestic price of petrol. Behind this irony lies a story of gross mismanagement of the oil economy by successive governments. The winds of reform that blew across other infrastructure industries such as telecom, transforming them unrecognisably, have largely been absent in the oil industry. The result is a mess characterised by ballooning subsidies, opaque pricing policies and a government that is guided more by political expediency than economic considerations in managing the industry. The reason why recent price increase of Rs.6.28 per litre — net of taxes, translating into hikes as high as Rs.8.36 in some States — turned out to be so big is that the government, which faced State elections, did not allow oil companies to increase prices in the last six months when global oil markets were on the upswing. By the time the oil companies got the nod, their deficits had spiralled so high that shock therapy became inevitable. We might yet see a partial rollback but the question to ask is: would it not have been less painful if prices had been increased gradually over the past few months rather than in a one-shot massive hike? A regular increase in small doses might also not have elicited the kind of opposition the big raise has now engendered.
That said, we need greater transparency in the pricing methodology adopted by the oil companies who link their domestic fuel prices to those in commodity markets abroad such as in Singapore and Dubai. The concept of “under-recovery,” which is basically the difference between the landed cost of petrol and its domestic selling price, needs to be questioned. India imports crude oil and not petrol or diesel. So why should domestic prices of the two fuels be linked to their international prices? Ideally, the price build-up should be based on the landed cost of crude oil plus the cost of refining and marketing the product. The increase in petrol prices also means the gulf with diesel has widened, further distorting the dynamics of the passenger car industry. By raising petrol prices, the government has only partially addressed the problems of the oil industry. The bigger challenge is dealing with a diesel price increase that has implications for inflation. There is also the issue of paring subsidies on cooking gas and kerosene that are weighing down government finances. Apart from trying to answer the basic question of whether the subsidy on cooking gas, which is by no means a poor man’s fuel, is necessary, the government needs to streamline the subsidy delivery mechanism to ensure that only the deserving enjoy it.
Q.1. Which of the following has been mentioned as a reason of steep increase in petrol prices?
(1) Governments’ failure to manage oil economy
(2) Current government’s tactic to keep prices in its control
(3) Rising demand of petrol across the globe
(4) Decreasing per capita income
(5) None of these
Q.2. According to the passage, what would have happened if the price of petrol was increased gradually?
(1) People would have been able to save money and could have been in a position to buy petrol
(2) Oil companies would have found alternatives to keep the prices affordable
(3) Government could have provided more subsidy to keep the prices in control
(4) The people and political parties would not have opposed it the way they have due to sudden and sharp increase
(5) None of these
Q.3. Why does the author question the connection of domestic price of petrol or diesel with their international prices?
(1) Internationally, their prices are much lower
(2) International politics is responsible in hiking the prices of the two
(3) India does not import petrol or diesel.
(4) International prices remain volatile and cannot be controlled.
(5) International price is at par with the domestic price of petrol
Q.4. Which of the following is meant by ‘under-recovery’ , according to the passage?
(1) Price difference between the international market and domestic market
(2) Difference between the domestic cost of petrol and its domestic selling price
(3) Scheme to buy petrol at subsidized rate
(4) Government debt due to excess subsidy
(5) None of these
Q.5. What should the price of petrol be based on?
A. Marketing the petrol
B. Refining the petrol
C. Landed cost of petrol
(1) Only A (2) Only C (3) Only B and C (4) Only A and B (5) All A, B and C
Q.6. Why is cooking gas no more ‘a poor man’s fuel’?
(1) Economically sound people also take advantage of the subsidized price of cooking gas
(2) The poor cannot afford to buy cooking gas
(3) The poor have better option for the fuel
(4) The government has prohibited the poor to buy cooking gas at subsidized rate
(5) None of these
Q.7. Which of the following is the irony being cited in the passage?
(1) The poor can afford the current price of petrol
(2) The government has reduced the price on public demand
(3) The people of India have found a cheap alternative of petrol
(4) In the international market the petrol price has reduced but in India price has increased.
(5) Not mentioned in the passage
Q.8-9. Choose the word which is most nearly the SAME in meaning as the word printed in bold as used in the passage.
Q.8. Addressed
(1) Collaborated (2) Opined (3) Located (4) Called upon (5) Dealt with
Q.9. Spiralled
(1) Increased (2) Curved (3) Reduced (4) Managed (5) Diagnosed
Q.10. Choose the word which is most nearly the OPPOSITE in meaning as the word printed in bold as used in the passage.
Q.10. Nod
(1) Dissent (2) Cooperation (3) Recognition (4) Permission (5) Agreement
ANSWER:
Q.1.(1)
Q.2.(4)
Q.3.(3)
Q.4.(5)
Q.5.(5)
Q.6.(1)
Q.7.(4)
Q.8.(5)
Q.9.(1)
Q.10.(1)
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MAHENDRA GURU