Remember, for equilibrium to be attain, both side pressure should be equal. Means P1 = P2 => d1gh1 = d2gh2 [d1,d2 are desity of water and oil] => 0.8*10*h1 = 1*10*0.25
=>h1 = 31.75cm
Sometimes, its better to see behind ourselves to enlighten our forward direction.