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CAT Exam Model Paper 3 with solutions for free online practice

Directions (Q. No. 32-34) The passage given below is followed by four alternative summaries. Choose the option that best captures the essence of the passage.

Question : 32

Total: 100

The current trend in crude oil prices gives a serious cause for concern and if this persists, many o f the calculations indicating further recovery and improved growth for the economy can be nullified. This year, the oil prices have risen from $ 70 per barrel to briefly touch $87, falling back somewhat thereafter. Such levels have not been seen since October 2008. That year, oil crossed a historic $140 per barrel. It is the continued upward trend (except for the period o f recession in the global economy) through the later part of the last year, which shows no signs o f abating. High oil prices, which rein in growth, will be a bad news for India in more than one way. Slower growth will take away some o f the buoyancy that revenue collection is now displaying. But, India’s problem is compounded by the fact that oil prices are not fully passed on and thus result in under-recoveries for the oil-marketing companies.

For India to be on a sustainable growth path, its energy prices will have to be market-determined and go up if global prices go up
The under-recoveries ruin the finances of the oil marketing companies and sap their energy and desire to run them efficiently
According to a senior Oil Ministry official, if oil prices again touch $87 a barrel and refuse to come down, then with the current consumer prices, the current financial year can end up with a massive under-recovery of ? 80,000
Since there is no election round the corner, government has in an arrogant manner raised the prices of oil (both diesel and petrol) and passed on the same to a common man, who is already hard-hit due to a very high level of inflation

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