At Trump-promoted Freedom Fuel gas stations, prices are up and questions linger

Even the Freedom Fuel Network promoted by President Donald Trump isn’t immune to rising gas prices.

Yet, the Philadelphia-area network of gas stations is expanding anyway, according to the company’s website.

The enterprise, currently made up of 25 stations spread across the region, garnered national attention earlier this month when it began selling regular gas for $3.47 a gallon — a nod to Trump, and 40 to 50 cents cheaper than other stations.

Gas station owners suddenly undercut, political observers, and government watchdogs wondered how long the promotion would continue.

It turns out, not long.

The Inquirer visited seven Freedom Fuel locations over several days, and while all were still selling gas cheaper than nearby competitors, the deep discounts from earlier were gone.

Three Philadelphia gas stations and two Delaware County locations were among those within the network selling gas at $3.92 a gallon Monday. Near Philadelphia’s Freedom Fuel stations, competitors were charging $3.89 to $4.09 for a gallon of gas. The same was true in South Jersey, where Freedom Fuel stations in Marlton and West Berlin were selling gas around 10 cents a gallon less than their nearby competitors.

Selling gasoline is a low-margin business, with owners making just “a few pennies” of profit per gallon sold, according to Eliezer Fich, a finance professor at Drexel University’s LeBow College of Business.

“They can sustain those losses for a little while, but it becomes unsustainable if you can’t offset that with a convenience store or a car wash,” said Fich.

Several Freedom Fuel stations visited by Inquirer reporters were small, appeared somewhat rundown, and offered a limited selection of products beyond gas. One location had an inoperable convenience store.

Fich doesn’t know the specifics of Freedom Fuel. He said independent stations banding together can offer purchasing power with refineries, which can be one route to securing lower fuel costs. But those savings wouldn’t come close to supporting the deep discounts the stations were offering.

Despite the White House’s involvement in promoting Freedom Fuel, a spokesperson said the company received no government subsidies and did not obtain fuel at a lower cost. The below-market prices would exist “for as long as the company chooses,” the spokesperson said.

If that’s the case, the business itself was already absorbing dramatic losses before the United States resumed attacks on Iran, leading to a jump in gas prices over the past week.

The average cost of a gallon of fuel in Philadelphia was $4.17 a gallon Monday, up from $3.95 a gallon last week, according to AAA. Nationally, the average cost of a gallon of gas also jumped back to $4 a gallon, up from $3.14 a gallon compared to last year.

Little is known about who is taking on the likely losses expected from the promotion.

Former Evesham Township mayor, Baltimore Ravens assistant coach, and self-proclaimed “proud Trump supporter” Randy Brown, along with former commodities trader Yoni Gontownik, both signed the certificate of formation, first obtained by The Newsground, an investigative news outlet. Neither could be reached for comment.

Cherry Hill developer Shamikh Kazmi and his brother Syed Kazmi are linked to at least six locations. The brothers, who have been embroiled in at least two lawsuits related to previous gas station ventures, also could not be reached for comment.

One of Shamikh Kazmi’s businesses was sued as a result of a lengthy trademark dispute with BP America Inc. and BP Products North America Inc. in 2021. That case ended with four deputies with the U.S. Marshals Service seized remaining brand signs in June 2022, according to court documents.

Also in 2021, the brothers were accused by Petroleum Marketing Group Inc, a fuel distribution company, of stealing thousands of gallons of gas from the company. Petroleum Marketing Group sued the brothers, who were ordered by a federal judge in February to pay $600,000.

» READ MORE: Freedom Fuel stations across the Philly region offer cheap gas, feature local owners, and raise ethical concerns

The company has yet to receive payment.

Still, the people behind Freedom Fuel are looking at expansion.

“Since launch, drivers have flooded us with one request: bring Freedom Fuel Network to my area,” read the website Monday. “We heard you. Due to overwhelming demand for additional locations, we’re expanding to serve more communities with lower prices at the pump.”

The website did not give a timeline for when those additional stations could come online and did not respond to a request for comment.

The Associated Press contributed to this article.