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You have a bad thermostat chances are if the temperature fluctuation of the coolant is that noticeable, replacing the thermostat would yield a bigger gain in MPG.
My car has 2 temperatures of the coolant: Cold engine and running engine, unless I yank the heater valve open the temperature gauge never moves. It would go up and down when I had a bad thermostat, I got horrible FE in the cold.
Flooring it on hills may kill FE if you have an ECU that enriches the fuel air mix at WOT.
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