The Freedom Fuel Network, which gained attention last month after President Donald Trump promoted its discounted gas prices, has launched a new location in Detroit. The move comes as a federal lawsuit regarding the chain’s fuel supply chain intensifies in Philadelphia.
According to GasBuddy, the Harper Avenue station is selling regular unleaded for $3.47 per gallon, making it the cheapest option in Michigan where the state average stands at $4.09. This Detroit outpost marks the first Freedom Fuel station outside of New Jersey and Pennsylvania, where the network previously operated 29 locations combined.
However, the low prices that drew customers may be the subject of legal scrutiny. A Georgia-based fuel supplier, Mansfield Oil Co., has accused businessman Syed Kazmi and his firm KRSM of failing to comply with a court order. An August 28 directive requires KRSM to maintain a minimum balance of $2.75 million in an M&T Bank checking account while the dispute over unpaid fuel invoices proceeds.
In a filing submitted Thursday, Mansfield Oil informed the court that the account is currently short by approximately $2.25 million. The supplier also revealed that, contrary to KRSM’s claims of ownership, the account now appears to belong to a different entity linked to the Kazmi family called ‘Universal.’
“The revelation that the account is now owned by ‘Universal’ also raises serious concerns that funds are being dissipated while KRSM fails to maintain the $2.75 million amount Ordered by the Court,” Mansfield stated in its filing.
Freedom Fuel itself is not named as a defendant in the suit. The litigation follows questions raised about how the chain could sustain such steep discounts during a period of supply constraints and rising fuel prices driven by the conflict in Iran.
Mansfield’s complaint, filed on August 19, alleges that between May and July, KRSM acquired more than 1.1 million gallons of fuel from a Pennsylvania terminal. After Mansfield issued an invoice in July for roughly $4 million, the suit claims KRSM failed to remit payment. At least some of the fuel was reportedly sold to Freedom Fuel stations, which began operations in Pennsylvania and New Jersey in early July.
The civil complaint asserts that “KRSM was able to sell such fuel for such low prices and garner such publicity because it never paid Plaintiff for such fuel.” Reports from Politico indicate that Kazmi’s brother, Shamikh Kazmi, owns at least six Freedom Fuel locations in New Jersey.
Mauro Tucci, a lawyer representing KRSM, told CNBC on August 30 that his client denies the allegations. “KRSM disputes the allegations in this case, which is an accounting dispute over fuel invoices mis-priced by Mansfield Oil,” Tucci said, adding that the firm would not comment further on the pending litigation. CNBC has requested comment from representatives for KRSM, Syed Kazmi, Mansfield Oil, and the Freedom Fuel Network.
Is it wise to trust discounted gas when there are active federal lawsuits hanging over the company? That $2.25 million shortfall is alarming.
Wow, Michigan drivers are saving over sixty cents a gallon right now. I don’t care about the drama, I’m just filling up at Harper Avenue.
So the money might be in a different family entity? That sounds suspiciously like they’re hiding assets while still offering rock-bottom prices.
My cousin works near the Detroit station and says it’s always packed. Makes you wonder how they keep the pumps running without paying suppliers.
This feels like a classic Ponzi-style operation. They sell cheap fuel on credit and use the cash flow to open new locations before the invoices come due.