The correct option is
A PSQR
The first statement in the sequence should be the one that best connects with S1. It should be a continuation or extension of S1.
P is first in the sequence: P best connects with S1. S1 says religion has been used and P tells us how. It says that religion has been used both as a weapon of isolation.
P is followed by S: S directly continues this point by saying that additionally religion has also been used as a morphia.
S is followed by Q: Q tells us what S does. It says that religion is used as a morphia to dull awareness.
Q is followed by R: R tells us more about Q. It says that it is used to dull awareness about real problems. S6 gives examples for Q. It says that the real problems are education, health and employment.
Finally, the correct sentence is 'Religion has been used both as a weapon of isolation and as morphia to dull awareness about real problems'.
Thus, the correct sequence is P S Q R. Hence, B is the correct option.