For Budget 2026, industry expectations center on measures to incentivize exploration and faster production, with the aim of raising domestic crude output towards 100 million tonnes (MT) and gas production to 50 billion cubic meters (BCM). There is also a push for rationalizing duties and taxes to help moderate retail fuel prices without compromising fiscal discipline.
In parallel, the sugar and bio-energy industry has proposed repositioning the sector as a “bio-energy hub”. Its submissions call for stronger policy support for ethanol blending, compressed biogas and green hydrogen. Industry stakeholders have also sought a more robust National Mission on Green Hydrogen, including incentives for “green bio-hydrogen” pathways that leverage agro-based feedstock.
Indian refiners, meanwhile, are recalibrating crude sourcing strategies, increasingly tapping Middle Eastern spot markets as they diversify away from Russian supplies. The shift reflects not only energy security considerations but also New Delhi’s broader trade engagement with Washington, where energy remains a key pillar of negotiations.
Prominent stocks across the oil, gas and bio-energy value chains include:
Oil and Natural Gas Corp. (ONGC)
Oil India Ltd
Reliance Industries Ltd (refining, petrochemicals and new energy)
Indian Oil Corp., Bharat Petroleum, and Hindustan Petroleum (OMCs)
GAIL (India) Ltd and Petronet LNG (gas transmission and regasification)
Praj Industries (biofuels and bio-energy engineering)
These companies sit at the center of themes spanning domestic exploration, refining, gas infrastructure, ethanol and advanced biofuels, and are typically sensitive to Budget signals on duties, pricing frameworks and incentive structures.
However, after adding some additional set of validations we have decided to select some stocks that have been standing the test of time to demonstrate a possible recovery.
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IOC (current market price ₹158.82)
Indian Oil Corp. (IOC), the country’s largest oil refiner, has shown resilient recovery in FY26 amid volatile crude prices and refining margins, with strong Q2 results driving stock gains. Pre-Budget 2026 expectations center on tax rationalization and LPG under-recovery compensation to protect OMC margins, though risks from potential excise hikes linger. Over the last year (Jan 2025–Jan 2026), the stock rose from around ₹128 ₹158, a gain of over 23%, outperforming amid profitability turnaround.
IOC has stepped up its purchases from spot markets, complementing its long-term contracts with Middle Eastern producers. By expanding its procurement of Basrah Medium from Iraq and Murban crude from the United Arab Emirates, IOC is ensuring flexibility in its supply chain while reinforcing India’s diplomatic positioning. Its scale and refining capacity make IOC’s decisions particularly influential, setting the tone for other refiners in the country.
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We decided to move higher in timeframe to get a better perspective. The lack of clarity kept the market tense as the trends witnessed a sharp correction from August 2024 much before the market topped out and the trends worsened towards the end of 2024. The reaction that emerged resulted in the trends retracing 50% of the entire rally seen from covid lows.
In 2025 the slow and sedate recovery has now resulted in the market stabilizing. The recovery since early 2025 has been slow and measured. We can observe that the intermittent declines that we have seen is being bought into.
From the chart above we can note that previous highs around 180 is few price steps ahead. However, the current volatile environment shall keep giving us some shocks. A saving grace if we have to consider is that whether the a Tenkan Sen and Kijus Sen recent cross on a higher timeframe could influence the prices higher. At the moment if the supports around 147 if maintained post Budget could give some new lease of life for an upmove to manifest.
Yet, it is IOC’s aggressive stance that underscores India’s evolving energy strategy. As the nation’s top refiner, IOC’s diversification efforts highlight the importance of balancing affordability, availability, and geopolitical considerations. By anchoring purchases in the Middle East, IOC is not only safeguarding domestic energy needs but also strengthening India’s leverage in trade talks with the US. Together with BPCL and HPCL, IOC’s actions reflect a coordinated industry-wide effort to secure resilience in an uncertain global oil market.
Ahead of Budget 2026, IOC seeks OID cess review on domestic crude, lower GST on fuels/LPG, and higher subsidies for under-recoveries exceeding ₹30,000 crore in 9M FY25. Analysts favor IOC for elevated integrated margins ( ₹3,000/tonne) funding ₹6 trillion capex in refining/energy transition, but warned of excise hikes pressuring FY26 profitability. Positive signals could lift stock towards ₹172- ₹207 targets.
ONGC (current market price ₹242.37)
Oil and Natural Gas Corp. (ONGC), India’s largest upstream player, posted strong consolidated profits in FY26 despite standalone pressures from low crude prices and forex losses. Pre-Budget 2026 expectations focus on exploration incentives to hit 100 MMT crude ambition, with upstream firms like ONGC better positioned than OMCs against potential excise risks. Over the last year (Jan 2025–Jan 2026), the stock played in a tight range around ₹260 ₹242, averaging to about 7%, reflecting production challenges and commodity volatility.
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As trends begin to spend time at the neutral zone as momentum attempts to revive clearly suggesting that some trends could emerge. The lack of domestic triggers continues to keep the revival at bay however there has been a steady attempt by ONGC to deliver. Once the prices are able to clear levels of 252 then we can experience some strong upward trajectory. As long as 210 is not compromised challenging its all-time highs at 340 looks possible in the next one year.
ONGC is seeking stronger government policy support to accelerate oil and gas exploration while also pushing for a review of the Oil Industry Development (OID) cess on older pre-NELP blocks, which currently makes production more expensive. The company is planning higher capital expenditure to strengthen self-reliance, with recovery in its Mozambique gas projects and partnerships with BP forming part of its broader growth strategy.
As India’s leading upstream player, ONGC is targeting an 11% increase in oil and gas output by 2026, a production push that will help insulate it from the kind of duty hikes often faced by downstream oil marketing companies (OMCs) such as IOC, BPCL, and HPCL. By focusing on exploration, reducing tax burdens, and investing in global projects, ONGC aims to secure long-term energy resilience while maintaining a competitive edge in a volatile market.
Conclusion
While crude oil has paled in significance in 2025 by the Precious and Base Metals the spotlight never left crude oil. As the world debates on who will control the oil flow the focus is now on reviving the momentum. It is quite clear from the run up to the budget that this sector will continue to be actively tracked by the investors.
Raja Venkatraman is co-founder, NeoTrader. His SEBI-registered research analyst registration no. isINH000016223.
Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
