Correct Option (B)
According to the passage, the implementation of a transparent, formula-based petrol pricing system enables oil companies to achieve greater profits through specific operational efficiencies. The text explicitly states, "This will mean that if one company can innovate and cut costs, it will make greater profits." Therefore, undertaking innovation (Statement 2) and cutting costs (Statement 3) are identified as direct methods for an oil company to enhance its profitability under this proposed system. Both statements align with the passage's explanation of how firms become more prone to innovate and be efficient.
Incorrect Options:
Statement 1 (promoting its sales) is not mentioned in the passage as a factor contributing to greater profits under the transparent pricing formula. The passage focuses on internal efficiencies like innovation and cost reduction, not sales volume or promotional activities, as drivers of increased profit margins in this context.
Statement 4 (selling its equity shares at higher prices) is irrelevant to the operational profits derived from the transparent, formula-based petrol pricing mechanism described. The passage discusses how companies can earn greater profits from their core business operations (selling petrol) by being innovative and efficient, not through financial market activities such as equity share sales.