When I had my 84 and 90 Jettas, each with a 1.8L, I saw a similar FE increase. The 84 I was able to set the timing up a few degrees at the distributor--no knock sensor. The 90 did have a knock sensor, and from the factory it had only 4*BTDC at idle. With 91 octane, I was able to bump it to 8* and I recall getting about 2 mpg.
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