A federal lawsuit filed in Philadelphia alleges that multiple Freedom Fuel Network gas stations sold millions of dollars in gasoline without paying the supplier, shedding light on the mystery behind their abnormally low prices that drew presidential praise last July.
The $4 Million Federal Lawsuit and Unpaid Fuel Claims
Mansfield Oil Co. of Gainesville Inc. filed the civil suit against KRSM Inc. in U.S. District Court in Philadelphia. According to the court filing, Syed Kazmi, acting as president of KRSM, requested in May to purchase gasoline from Mansfield at Energy Transfer’s Twin Oaks terminal in Aston, Delaware County.
The company subsequently took 1.12 million gallons of gasoline and distributed it to stations operating under the Freedom Fuel Network banner. KRSM was able to sell such fuel for such low prices and garner such publicity because it never paid [Mansfield] for such fuel
, the suit alleges.
White House Promotion and the Summer Price Cuts
The network made national headlines when the White House actively promoted its launch in July. The first location opened on Dreshertown Road in Upper Dublin Township, Montgomery County, pricing its gasoline at $3.47 a gallon, a nod to Trump being the 47th president.
President Donald Trump took to social media to champion the development amid rising fuel costs driven by international tensions. President Trump is leading the charge to lower gas prices this summer – putting more money in your pocket
, the White House official account posted on X alongside announcements celebrating the network’s expansion.
“I am pleased to announce that a VERY smart Retailer, located throughout the Northeast, is stepping up. America has never been stronger than it is now, and Gas Prices will soon be back to the Record Low Prices Americans enjoyed at the pump before our very successful ‘excursion’ in Iran.”
Donald Trump
When the network debuted, its prices sat roughly 40 to 50 cents lower than competing stations in the region. Industry experts immediately questioned how such steep discounts could be sustained in a market where wholesale and tax realities left little room for profit.
Industry Skepticism and the Deficit Behind the Discounts
Energy analysts pointed out early on that the pricing structure defied standard market mechanics. Patrick De Haan, head of petroleum analysis at GasBuddy, observed that while grand openings often feature temporary discounts, the rapid overnight rebranding of dozens of stations across Pennsylvania and South New Jersey was unprecedented.
Tom Kloza, petroleum analyst and chief energy adviser at Gulf Oil, estimated that local break-even prices hovered around $3.60 per gallon when accounting for baseline product costs and regional tax obligations. In Pennsylvania, stations faced roughly 76 cents per gallon in federal and state taxes, while New Jersey stations contended with 57.5 cents in state levies.
An independent analysis prepared for the Washington Post by FuelTrust estimated that operating at such heavily discounted margins could cost the Freedom Fuel Network $24,000 per day in revenue compared to competitors, accumulating hundreds of thousands of dollars in potential deficits over time.
Environmental Penalties and Prior Legal Troubles
The financial dispute is not the only regulatory hurdle facing the network’s leadership. Shamikh Kazmi, a Cherry Hill developer who are linked to at least eight of Freedom Fuel’s 29 locations, shares management ties with properties that have drawn heavy state scrutiny.
Prior to the launch of the Freedom Fuel banner, the New Jersey Department of Environmental Protection issued $429,900 in penalties across 17 stations managed by Kazmi and owned by publicly traded asset manager Blue Owl. State regulators stated that the facilities had repeatedly, significantly and substantially failed to comply
with environmental laws regarding underground fuel storage tanks, air pollution controls, and registration accuracy.
Public records also show that the Kazmi brothers were previously embroiled in past litigation, including a 2021 trademark dispute involving BP and accusations from Petroleum Marketing Group Inc. alleging fuel diversion at earlier station ventures.
Legal Defense and the Current Status of the Network
Representatives for the fuel network have pushed back against the distributor’s claims in federal court. Attorney Mauro Tucci released a statement on behalf of KRSM maintaining that KRSM disputes the allegations in this case, which is an accounting dispute over fuel invoices mispriced by Mansfield Oil.
Meanwhile, the White House has maintained distance from the business operations of the discount chain, with a spokesperson clarifying that the administration had zero contact or dealings with KRSM Inc. or its principals.
While the Freedom Fuel Network has expanded to 29 locations across the region, pricing at the pump has steadily drifted upward, aligning more closely with traditional discount competitors as the legal battle over unpaid fuel invoices proceeds in federal court.
