Your thoughts are correct on have engine nears its torque peak when it is working hard. When a engine is at its torque peak , it is also at the RPM that it reaches its peak VE at (Volumetric Efficiency) and when at the speed it will use the least amount of fuel per HP hour produced when under a moderate to heavy load. A few of the reason that oil burners get better MPG is because first they typical cruise at or around peak VE speeds (when you cruise a diesel at RPM's well past this you will find MPG suffers) and next, they have a very hi compression ratio that extracts more energy for expanding hot gasses and lastly the fuel has about 10% more heat energy too. If you were to take a gas engine and tun it so it reaches its peak VE at a lower RPM and raise compression ratio to 11 or 12 to 1 (forget about 87 or even 89 octane fuel) you would see a increase in efficiency. This is not likely to happen because many are in love with 87 octane fuel even though 93 is today maybe only about 4% more in cost and the improved efficiency would more than offset added fuel costs. Another thing, today they are pushing flex fuel engines and E85 but again they are missing the boat because they keep building engines that are 87 octane tolerant and then market them to burn 105 octane E85 too. If they would raise CR's of Flex Fuel engines to at least 11 to 1 or more and make 93 octane or E85, you would see improved economy and more power. You could even take it one step further and make a E85 only engine and run it with about 13 to 1 CR and get MPG similar to what a 9 to 1 CR engine gets on 87 and a lot more power. TO do this though since public can be kinda dense about fuel requirements, they would need to change pump nozzles so you could not put 87 octane in one of those engines (they did when unleaded came out) but I do not see this happening so we continue to waste more fuel as a mass but a individual builder could follow a different path here and save money in long run.