Gas stations across Pennsylvania and New Jersey operating under the newly formed Freedom Fuel Network offered abnormally cheap fuel this summer following a political push to lower prices. Now, a lawsuit alleges that a supplier went unpaid for the fuel, while analysts question the financial math behind the discounts.
Trump lauded low prices at Freedom Fuel. A supplier
The Unusually Low Prices and the Political Push
When the Freedom Fuel Network debuted in July across Pennsylvania and South New Jersey, drivers encountered gas prices that sat roughly 40 cents below prevailing market rates. Drivers have been lining up outside Freedom Fuel Network gas stations in Philadelphia, attracted by the advertised gas prices that fall 10 to 20 cents per gallon below what other stations are charging. Of the 29 stations participating through Pennsylvania and South New Jersey, many changed their branding seemingly overnight to reflect their participation in the new network. Many of the 29 participating stations changed their branding overnight to join the discount network, drawing long lines of motorists seeking relief at the pump. The rollouts quickly drew attention from political figures. On July 7, the White House’s official account posted on X, announcing that The FIRST Freedom Fuel Network gas station has LANDED in Philadelphia,
and that the station lowered the price at the pump to $3.47 for our 47th President.
The post credited Trump with the lower prices. President Trump is leading the charge to lower gas prices this summer – putting more money in your pocket,
it read. I am pleased to announce that a VERY smart Retailer, located throughout the Northeast, is stepping up,
Trump wrote in a July 1 Truth Social post. 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.
Yet behind the political praise, industry experts began examining how retailers could sustain such steep discounts. Financial Realities and Regulatory Penalties
Trump Is Touting Cheap 'Freedom Fuel' Gas
Energy analysts questioned whether the network’s pricing model made economic sense. Tom Kloza, petroleum analyst and chief energy adviser at Gulf Oil, noted that gas stations aren’t able to sustain such low prices for long, and the stations may have to either close down or raise their prices dramatically. Kloza estimated that break-even prices for gas were about $3.60 per gallon, and selling gas at a loss for more than a day doesn’t business sense. Patrick De Haan, head of petroleum analysis at GasBuddy, said that while some gas stations offer cheap gas on their opening day, he had never seen so many gas stations change their branding and prices overnight. An FuelTrust analysis prepared for the Washington Post revealed that operating at such low prices could have cost the Freedom Fuel Network $24,000 per day in revenue compared to its competitors. This equates to as much as $336,000 in revenue. Ownership and administrative records connected to the network also revealed prior regulatory scrutiny. At least six of the stations are managed by Shamikh Kazmi, a businessman. Blue Owl, a publicly traded asset manager, owns those six stations. Trump has previously owned as much as $25 million in Blue Owl stock, but his most recent financial disclosure indicates he has sold almost all of his shares. In May, before the Freedom Fuel Network’s existence, the New Jersey Department of Environmental Protection (DEP) placed a $429,900 penalty on 17 stations that Kazmi managed and Blue Owl owned. Approximately half of the penalty applied to issues at gas stations that have become part of the Freedom Fuel Network, and they related to issues including the underground tanks storing fuel, submitting false information to register the tanks, and issues with air pollution control. The NJ DEP wrote that the stations repeatedly, significantly and substantially failed to comply
with state law, and that they didn’t comply with previous enforcements. Lawsuits and Unpaid Invoices
A new lawsuit provides possible answer: A fuel supplier alleges that it was not paid for gas that was ultimately delivered to stations in the Freedom Fuel Network. The company posted a message on its website remarking on its explosive growth, indicating that some stations’ average volume had increased by more than 50%, while some locations experienced surges of over 100%. According to Jeff Lenard, spokesperson for the National Association of Convenience Stores, gas stations were paying about $3 per gallon, plus they have to pay about 76 cents per gallon to cover Pennsylvania federal and state taxes. In New Jersey, stations paid about 57.5 cents in taxes. Plus, they had to pay operating costs, leaving questions about who is actually absorbing those losses. As the legal proceedings unfold, the future viability of the network’s discount model remains under close scrutiny by market observers.
