Executive answer
In energy and hydrocarbons, observing a public quote does not finish the analysis. Economic price may depend on product, quality, location, date, volume, currency, credit, transport, storage, capacity, losses and contractual obligations. Transfer pricing should reconstruct the controlled transaction and adjust only quantifiable differences supported by evidence.
Mexico’s current sector framework includes the Hydrocarbons Sector Law published in 2025 and the applicable permits, provisions and transition rules. Compliance with a tariff, permit or specification does not automatically establish arm’s-length pricing. Conversely, a tax benchmark does not replace regulatory obligations.
A useful file connects the molecule or product, delivery point, infrastructure, agreement, trader, risk, invoice and accounts. It separates purchase and sale, transport, storage, services, financing and guarantees rather than compressing them into an “energy price.”
Energy value-chain map
Identify producers, assignees or contractors where relevant, marketers, transporters, storage providers, distributors, users, infrastructure owners, service providers and financiers. Record authorization, territory, assets, people and decisions.
Map controlled transactions involving crude oil, gas, refined products or other relevant products; transport, capacity, storage, terminals, processing, blending, marketing, technical services, leases, guarantees and debt.
Trace each flow from nomination and measurement through delivery, quality, invoicing and payment. Link operational volumes with invoiced volumes and losses.
Product and quality
Define the exact specification, including composition, density, sulfur, calorific value, octane, moisture, contaminants or other relevant parameters. Record laboratory, method, date and tolerances.
A reference for a different grade needs a verifiable adjustment. Use observable differentials or technical evidence rather than arbitrary percentages.
Document blending and who decides it. An improvement or deterioration in quality may follow specific functions and costs.
Quality disputes need samples, contractual terms, acceptance, penalties and resolution. Reconcile those events to the final price.
Location and delivery point
Identify the hub, terminal, pipeline, border, plant, tank and contractual transfer point. The same molecule may have a different value because of access and congestion.
Separate the commodity price from transport and basis differentials. Compare routes, distance, capacity, losses, tolls and constraints.
Incoterms or equivalent clauses should agree with conduct and insurance. Paying freight does not necessarily mean controlling logistics or risk.
When using a foreign index, explain the bridge to Mexico and currency. Retain dated sources.
Pricing date and period
Define pricing date, window, average, publication, market and time zone. Compare them with nomination, loading, delivery and invoice dates.
Date selection can transfer value in volatile markets. Document who selected it, what the agreement allowed and which independent alternatives existed.
Do not choose a favorable point retrospectively. Apply a consistent policy and record exceptions.
For year-end adjustments, retain the prices and versions used. Do not rewrite the transaction using later information without support.
Volume and commercial terms
Compare parcel size, frequency, take-or-pay, ship-or-pay, swing, tolerances, minimum volume and reserved capacity. A fixed charge may coexist with a variable price.
Analyze volume discounts, commitment and flexibility. A spot operation is not equivalent to a multiyear supply agreement.
Record credit, term, guarantee, prepayment, currency and default. Implicit financing may require adjustment.
Reconcile nominations, measurements, imbalances and invoices. Operational differences may become intercompany balances.
Selecting a CUP
Prioritize reliable internal comparables where the entity buys or sells with third parties under similar conditions. Test independence and differences.
For quoted prices, identify the publication, product, market, date and access. A quote is a starting point rather than a complete comparable.
Adjust quality, location, logistics, volume, term, credit and other factors only using verifiable data. Document the formula and order.
If no sufficiently reliable CUP exists, evaluate another method. Do not force the quote merely because it appears objective.
Zugzwang’s Energy TP Review connects product, quality, location, date, volume, infrastructure, services and financing before reaching a price conclusion.
Transport and capacity
Map the owner, operator, shipper, contracted capacity, use and decisions. Separate regulated tariffs where applicable, additional services and unregulated transactions.
An authorized tariff does not necessarily price the entire intercompany bundle. Identify connections, compression, measurement, balancing, maintenance and penalties.
For unused capacity, determine who forecast, reserved and could release or resell. Take-or-pay may allocate risk contractually, subject to conduct.
Reconcile invoices with nominations and meters. Fixed and variable charges should follow the agreement.
Storage and terminals
Define capacity, throughput, days, losses, quality, blending, loading, unloading and services. Identify the asset and utilization.
Compare third-party agreements for location, term, exclusivity and service level. Adjust for availability and risk.
Stored inventory creates working capital, loss and price exposure. Determine who owns, decides and hedges.
A related terminal may provide a service using unique assets. Cost plus may not reflect scarce capacity; a CUP or valuation may be more appropriate depending on data.
Trading and marketing
Distinguish administrative execution from trading that controls positions, contracts, credit, logistics and hedging. Document limits, systems and authority.
A trader without financial capacity or risk authority should not receive a principal return merely by issuing the invoice. An entity optimizing a portfolio may contribute more than a routine commission.
Use positions, value-at-risk or other internal metrics as supplementary evidence and reconcile them to results.
Analyze back-to-back agreements and deviations. The spread should follow functions and risks.
Hedges and derivatives
Map policy, exposure, instrument, counterparty, approval, accounting and beneficiary. Determine whether the hedge protects a sale, inventory, FX or financing.
Separate the treasury function from business risk. A derivative loss may offset a physical gain and should not be evaluated in isolation.
For guarantees and collateral, determine incremental benefit and price. Implicit support is not automatically a remunerated guarantee.
Retain designation, effectiveness and allocation. Do not distribute hedge outcomes without identifying the exposure.
Technical and field services
Inventory engineering, geology, maintenance, drilling, operations, HSE, procurement, laboratory and administration. Record personnel, equipment, deliverables and beneficiaries.
Define the cost base, markup and pass-through. Specialized equipment, risk and liability may need analysis different from routine support.
Prove performance and benefit with work orders, reports, time and acceptance. Separate shareholder activity and duplication.
Services may already be embedded in another agreement; avoid duplicate charges.
Assets, leases and valuation
For pipelines, terminals, equipment and rights, document ownership, use, life, investment, maintenance and capacity. Accounting title does not determine all control.
Compare rent by asset, term, location, utilization, residual value, insurance and obligations. Unique property may require valuation.
A restructuring transferring an asset, contract or business opportunity needs compensation analysis, not merely a machinery invoice.
Reconcile capex, permits and operations. The authorized entity may perform valuable functions without assuming that a permit creates the entire return.
Project finance
Delineate debt, equity, guarantees, cash waterfall, term, currency, subordination and capacity. Projects may have long pre-cash periods and specific risk.
Compare loans by stage, guarantees, offtake and covenants. A generic corporate rate may not reflect project finance.
Separate arm’s-length pricing from deduction limits. Document rating, scenarios and alternatives.
Monitor balances and interest; debt that cannot be serviced may require another characterization.
Regulation and related agreements
Prepare a matrix of permits, obligations, counterparties, related parties and approvals. Confirm that the intercompany agreement is compatible with regulatory conditions.
Separate regulated tariffs, commodity prices, rights, tax and services. Trace each item to its source.
Transition rules under a new law may preserve or change situations. Confirm status by operation and date rather than generalizing.
The tax conclusion should cite the law in force for the year.
Segmentation and reconciliation
Segment by product, agreement, point, service and asset. Allocate costs by volume, capacity, hours, use or causation.
Reconcile metering, inventory, nominations, invoices, trial balance and returns. Explain losses and adjustments.
Maintain a bridge for units, FX and prices. A conversion mistake can look like an economic adjustment.
Preserve raw data and rules; reproducibility is essential in volatile markets.
Losses and extraordinary events
Build a budget-to-actual bridge for price, basis, volume, quality, logistics, FX, hedging, availability and regulation. Assign control.
A shutdown, force majeure or congestion requires review of agreement, insurance, mitigation and decisions. Do not allocate cost by booking location.
Recurring losses for a routine entity require review of the model, cost base and conduct. A range does not explain an event.
Document contemporaneously because markets change and later reconstruction is vulnerable.
Operational TP
Monitor prices, differentials, volume, quality, utilization, imbalances, inventory, credit, hedges, services and margin. Configure alerts.
Bring commercial, operations, regulatory, treasury, finance, tax and legal together. Every exception needs an owner and deadline.
Simulate true-ups before close and review VAT, customs, withholding and contractual effects. An income-tax correction does not automatically fix other regimes.
Internal audit and source control
Sample purchases and sales from different dates, capacity agreements, technical charges, hedges and balances. Verify product, date, unit, FX, quality, point, volume, invoice and payment. Recalculate the bridge from the independent source to the final price.
Ask which differences could not be quantified, who approved exceptions, which tariff includes additional services and which charge lacks evidence. Record the amount, year, cause, owner and remediation.
Control access and licensing for market publications. Archive the permitted data, identifier, time and methodology rather than relying on a live link that may change. Separate raw data, calculation and approved output.
Review new counterparties, routes, products and permits quarterly. A historical comparable may lose reliability when infrastructure or agreements change.
Close calendar and decisions
Before budgeting, approve volume, indices, capacity and funding assumptions. Reconcile measurement and margin monthly. Review CUPs, adjustments, services and permits quarterly. Before close, freeze sources, simulate the true-up and coordinate invoicing and indirect-tax effects.
After filing, compare forecast with the final result and explain deviations. Accuracy and exception ageing demonstrate control maturity.
Sector defense file
Include the chain, permits, FAR, agreements, quotes, adjustments, measurement, quality, logistics, assets, services, financing, methods and reconciliation.
Sample operations from different dates, adjustments and exceptions. Retain dated copies or captures of properly licensed sources.
Prepare an index and RACI. Evidence often resides in multiple systems and teams.
Illustrative example
A related party sells gas indexed to a foreign hub. Delivery occurs in Mexico, the buyer reserves transport and the specification differs. The index is insufficient: location, quality, transport, date, volume and credit require supported adjustments. If differences cannot be quantified reliably, another method should be evaluated.
The operation may be arm’s length, but only after the complete bridge is shown.
Conclusion
Energy requires transactional precision. A quote provides transparency, but comparability depends on physical, commercial, financial and regulatory conditions.
An integrated map separates commodities, infrastructure, services and capital, avoids arbitrary adjustments and supports the outcome through market change or review.
Request an Energy TP Review to build the comparability bridge, map services and assets and reconcile each transaction to operational evidence.
Verified official sources
- Mexican Chamber of Deputies, current Hydrocarbons Sector Law.
- Mexican Chamber of Deputies, current Income Tax Law, Articles 76, 179 and 180.
- OECD, Transfer Pricing Guidelines 2022, Chapters I-III and X.
- OECD, Transfer Pricing Country Profile: Mexico.
Verification closed on August 2, 2026. Confirm permits, transition rules, agreements, products and applicable regulation before acting.