In my high school days I heard the story of a device that would give a Volkswagen Beetle 200mpg. It appears that the device was bought by and oil company. Can anyone confirm this?

As long as you can do your job, don't say anything. Your boss has come to rely on you and is acting very immaturely. Just do your job to the best of your ability the the "handicap" given to you and forget about the extras. The fact that this has happened to you should give you an idea of your worth to the company and take this as a reverse compliment.