Policy reasoning — petroleum pricing by market Statement: Should oil companies be allowed to fix the retail prices of petroleum products depending on prevailing market conditions? Arguments: I. Yes — this is the only way to make the oil companies commercially viable. II. No — this will increase the retail prices of essential commodities and cause hardship to the masses.

Introduction / Context:This is a classic “Which arguments are strong?” question from public policy and economics. The issue is whether oil companies should be allowed market-based pricing for petroleum products. A strong argument must be relevant, factually plausible, and address the core of the decision without relying on exaggeration or trivialities.

Given Data / Assumptions:

• The question concerns pricing freedom tied to market conditions.
• Argument I claims commercial viability is tied to market pricing.
• Argument II claims social hardship if prices rise and transmit to essentials (transport, logistics, food).
• No hidden data on subsidies, competition, or safety nets are provided; we judge arguments on general merit.

Concept / Approach:

• Energy pricing affects firms’ cost recovery, investment, and supply reliability (efficiency view).
• Energy prices also have strong pass-through effects on inflation and cost of living (equity view).
• In evaluation questions, two opposing but independently cogent perspectives can both be strong if each presents a valid policy dimension.

Step-by-Step Solution:

Verification / Alternative check:

Why Other Options Are Wrong:

Common Pitfalls:

Final Answer: