I am now 100% sure my thermostat is failing. Once reaching 'operating temp' according to my gauge, OBC tells me the temp fluctuates between 74-88 on the freeway and 88-91 when idling or driving at low speeds. That explains why my average mileage is 18.5 mpg a tank.
Past: 1999 Techno Violet Metallic M3
Present: 2012 135i DCT Dinan S2