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<E30> 325is Fuel Consumption

Lately I've been getting really bad gas mileage (16 mpg) and am
wondering what are some of the most likely causes and how I can improve
it.  I think my valves are in need of an adjustment (noisy) and plan to
do this soon.  Is this something that could be contributing to my poor
economy?  Any suggestions would be helpful.

'88 325is

Thanks, 
Aaron Smith
aaron@domain.elided
D