The argument in the passage highlights that due to the increase in oil prices, we need to focus on hydro-electric projects. The passage implies that hydroelectric power can serve as a viable alternative to oil. This statement rests on certain assumptions, which must be identified.
Let’s examine the assumptions:
Statement I: Hydro electric power is a renewable source of energy.
This must be assumed to justify the shift from oil to hydroelectricity. Since the passage argues for the need to "tap such renewable sources," it assumes that hydroelectricity qualifies as renewable energy. Therefore, this statement is definitely assumed.
Statement II: Hydro electric power is comparatively cheaper.
The motivation for moving away from oil is rooted in the increasing prices of oil. The argument to shift interest toward hydroelectric projects implies that hydroelectric power is more affordable or cost-effective than oil. Otherwise, the transition would not solve the problem of rising energy costs. Hence, this assumption is also necessary for the argument.
Therefore, both assumptions — that hydro power is renewable and cheaper — are integral to the argument’s logic.
Option 1 — incorrect because only Statement I is considered, but both are needed.
Option 2 — incorrect because Statement II alone is insufficient.
Option 3 — correct, as explained.
Option 4 — incorrect, both assumptions are valid.