A fuel distributor supplying the local Freedom Fuel gas station network is facing a federal lawsuit alleging it failed to pay nearly $4 million for more than a million gallons of gasoline.
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The lawsuit, which was filed last month in the U.S. District Court for the Eastern District of Pennsylvania, names Mercer County, New Jersey-based KRSM Inc. and its president, Syed Kazmi.
Mansfield Oil Company, of Gainesville, Georgia, claims KRSM took delivery of approximately 1,124,594 gallons of fuel without paying, according to the lawsuit, which was first reported on by multiple national news outlets.
KRSM entered into a credit agreement with Mansfield Oil on Aug. 17.
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In May, Kazmi purchased petroleum products from Mansfield at the Sunoco LP and Energy Transfer fuel supply terminal, known as the “Twin Oaks Terminal,” in Delaware County.
Between May 21 and July 7, KRSM allegedly credited the fuel from Mansfield’s account to supply gas stations at discounted rates throughout Pennsylvania and New Jersey. A portion of that inventory went to Freedom Fuel locations.
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Freedom Fuel has stations on Route 13 in Bristol Borough, Street Road in Bensalem Township, Street Road in Upper Southampton Township, and East Street Road in Warminster Township. The chain launched in early July.
Freedom Fuel stations made headlines for selling gas at prices below local prices.
The average gas price was $4.27 per gallon across the five-county Philadelphia region on Tuesday, and the Freedom Fuel station, according to GasBuddy, was selling it for $3.99 per gallon.
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More than a month before the lawsuit, President Donald Trump praised the chain on Truth Social, stating the retailer was reducing fuel costs because “they love the U.S.A.” The White House also shared a promotional video featuring the brand.
While initial details regarding the station network’s operations were sparse, Freedom Fuel states on its website that it is a privately owned enterprise that “answered President Trump’s call to action to lower prices at the pump.”
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“We didn’t hesitate; we took decisive action and lowered our prices to make filling up more affordable for hardworking families across the greater Philadelphia area,” the website reads.
A White House spokesperson told this news organization in July that federal officials were not “involved in the company, nor has the Administration given the company any funding.”
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The legal complaint alleges KRSM exceeded its approved $150,000 credit threshold.
“Defendant KRSM knowingly took delivery of fuel well above its approved credit limit of $150,000 pursuant to the Agreement,” the lawsuit states. “Defendant KRSM asserted its control over the misappropriated fuel, by selling the same to retail fueling locations and having it delivered to its own stations.”
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Mansfield Oil claims KRSM refused draft requests for payment, according to the lawsuit.
Mansfield alleges that KRSM’s continued refusal to return or pay for the product resulted in direct losses of nearly $4 million, plus interest and legal costs.
U.S. District Judge Gerald Austin McHugh last week granted part of Manfield’s preliminary injunction request. KRSM was required by the judge to keep a balance of at least $2.75 million in the bank account listed in the gas contract.
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Neither KRSM nor Kazmi offered comment regarding the civil action, according to a report by Fox Business Channel.
