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Statement — Oil marketing companies decided to defer the usual fortnightly revision of petrol and diesel prices due to volatility in world markets.\nQuestion — Which conclusion necessarily follows?

Difficulty: Medium

if only conclusion I follows
if only conclusion II follows
if either I or II follows
if neither I nor II follows, and
None of the above

Correct Answer: if only conclusion II follows

Explanation:

Introduction / Context:
Companies defer revising administered fuel prices because global prices are volatile. We compare a macro impact claim (cascading inflation from diesel) versus a risk-management rationale (worry about sudden spurts upsetting calculations).

Given Data / Assumptions:

Action: defer revision.
Stated reason: world-market volatility introduces uncertainty.

Concept / Approach:
Conclusion II rephrases the precautionary motive implied by “volatility.” Conclusion I, while often true in economics, is not stated nor required to justify the deferral decision.

Step-by-Step Solution:

Conclusion I: “Diesel price rises may have cascading effects.” This is a general economic proposition, not entailed by the specific deferral announcement.Conclusion II: “Companies are worried a sudden international price spurt may upset earlier calculations over the next weeks.” This aligns directly with “defer due to volatility.”

Verification / Alternative check:
Even if diesel increases were inflation-neutral (hypothetically), deferring could still be sensible due to pricing risk — so II follows independently of I.

Why Other Options Are Wrong:
Any option endorsing I overstates what is given.

Common Pitfalls:
Importing macroeconomic consequences not referenced in the stem.

Statement — Oil marketing companies decided to defer the usual fortnightly revision of petrol and diesel prices due to volatility in world markets.\nQuestion — Which conclusion necessarily follows?

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