Freedom Fuel Detroit opens as supplier-payment case presses on

Freedom Fuel Detroit is now open on Harper Avenue, giving the Trump-promoted discount gasoline network its first location outside New Jersey and Pennsylvania. The opening comes as a Georgia supplier presses allegations that a distributor linked in its lawsuit failed to pay about $4 million for fuel, with some of that fuel allegedly sold to Freedom Fuel stations. Freedom Fuel itself is not a defendant.

CNBC reported that regular unleaded at the Detroit location was priced at $3.47 a gallon, compared with a $4.09 Michigan average listed by GasBuddy at the time. For drivers, that is a 62-cent-a-gallon difference. Freedom Fuel said on its website that it expanded after what it described as the network’s success and savings for communities.

The Detroit station follows the network’s July launch and President Donald Trump’s July 1 post about its lower prices, CNBC reported. The network had 29 locations in New Jersey and Pennsylvania at the time of the Detroit opening, though CNBC said GasBuddy data showed its stations were no longer the cheapest options in those states.

What is the Freedom Fuel lawsuit about?

Mansfield Oil Company of Gainesville, Georgia, filed suit on Aug. 19 against Syed Kazmi and his company, KRSM, in the U.S. District Court for the Eastern District of Pennsylvania, according to CNBC and Politico. Mansfield alleges KRSM collected more than 1.1 million gallons of fuel from a Pennsylvania supply terminal between May and July, then did not pay a roughly $4 million invoice sent in July.

Mansfield further alleges that KRSM sold some of the fuel to Freedom Fuel stations. The complaint does not say how much of the fuel allegedly ended up at Freedom Fuel stations. These remain allegations in civil litigation, not findings by a court.

KRSM lawyer Mauro Tucci told CNBC on Aug. 30 that the company disputes the claims and characterized the matter as an accounting dispute involving fuel invoices that Mansfield mis-priced. Tucci said KRSM would not comment further while the case is pending.

What does the bank-account dispute mean?

In a later court filing, Mansfield alleged that KRSM was not following an Aug. 28 order requiring at least $2.75 million to remain in an M&T Bank checking account while the case proceeds. Mansfield said the account was about $2.25 million below that level and alleged that M&T told it the account had shifted to a different Kazmi-related entity called Universal.

The court-order dispute concerns whether funds required to be held during the case remain available. It does not change the lawsuit’s parties: Mansfield named Kazmi and KRSM, while Freedom Fuel is not named as a defendant.

A White House official told Politico that the administration had no contact or dealings with KRSM or Syed Kazmi. Freedom Fuel has said it is cutting prices to benefit its community and local economy.

This story draws on original reporting from CNBC.