A fuel supplier has taken a New Jersey distributor and its president to court, alleging they failed to pay for gasoline that was later sold through stations in the Trump-promoted Freedom Fuel Network. The case highlights the financial pressures that can build behind aggressive price-cutting in the competitive retail fuel sector, where distributors typically operate on thin margins and rely on trade credit from suppliers to keep product moving to stations.

Mansfield Oil Company, a large fuel supply and distribution company, filed the lawsuit against KRSM Inc. and its president, Syed Kazmi, on Aug. 19 in the U.S. District Court for the Eastern District of Pennsylvania. According to the complaint, KRSM obtained approximately 150 loads of fuel from Mansfield's account at the Twin Oaks terminal in Pennsylvania between May 21 and July 7, totaling roughly 1,124,594 gallons valued at $3,998,868.46.

"KRSM sold a portion of such fuel to its stations that are part of the Freedom Fuel Network," Mansfield alleges in the complaint. The company further claims that KRSM was able to sell some of the fuel at low prices precisely because it had not paid Mansfield for it. Those allegations have not been adjudicated.

KRSM had been a Mansfield customer since 2022. A commercial credit application included with the complaint, signed by Kazmi, states that if Mansfield extended credit and KRSM purchased fuel, KRSM would be responsible for paying for it. Under the agreement, payment was to be made by electronic funds transfer within 10 days of receiving an invoice.

Mansfield acknowledged in the complaint that a data-receiving error delayed its ability to send invoices until early July. The company said it later discussed what it characterized as minor pricing discrepancies with Kazmi, revised the invoices, and sent them to KRSM on July 17. Mansfield alleges its bank subsequently advised it that KRSM had refused attempted drafts from its account.

KRSM disputes Mansfield's version of the payment dispute. In an Aug. 25 court declaration, Kazmi said he "did not agree that the amounts Mansfield demanded were correct or owing." In court filings, KRSM contends the dispute centers on the prices Mansfield charged for the fuel and says it objected to the invoices before the lawsuit was filed.

On Aug. 28, U.S. District Judge Gerald Austin McHugh vacated an earlier temporary restraining order that had frozen the identified M&T Bank account, but granted Mansfield's requests for preliminary injunctions in part. McHugh ordered the defendants to maintain at least $2.75 million in the account while the litigation proceeds. Such preliminary relief requires a court to find that the plaintiff has a reasonable likelihood of success, but it is not a final determination of the merits, and the underlying claims remain contested.

The Freedom Fuel Network drew national attention after lowering pump prices amid President Donald Trump's push for cheaper gasoline. The White House published a Freedom Fuel Network video on July 7 promoting the network's lower prices.

Freedom Fuel says on its website that it is a privately owned company that "answered President Trump's call to action to lower prices at the pump."

"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 company says on its website.

Freedom Fuel also reports that 25 participating stations experienced an average volume increase of more than 50% after prices were lowered, with several locations increasing more than 100%. Those figures are company-reported and have not been independently verified.

Mansfield's lawsuit brings claims including breach of contract, unjust enrichment, action for the price, account stated, and conversion. The company is seeking at least $3.998 million, plus interest, costs, and other damages. The litigation is ongoing, and further filings in the Eastern District of Pennsylvania case are expected to shape how the pricing dispute is resolved.

Fox Business reached out to attorneys for KRSM and Kazmi, Freedom Fuel Network, and counsel for Mansfield Oil for comment.