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No, I do not believe it does calculate MPG correctly. The SG assumes the engine will be in closed loop running stoichiometric air fuel ratios.
However, I rarely use the SG for tracking MPG in my cars. I used it to monitor other things like coolant temp, engine load, battery current flow (in the Prius) etc. that help me tweak my driving style and better understand the operation of the drivetrain.
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