If first fuel-up is partial...
 

there seems to be a problem in computing mpg... see my car here:
https://www.fuelly.com/driver/khumarahn/matrix-2
first fuel-up was partial, and was marked as such

The system does not calculate MPG for partial fillups and when a partial is done, no calculation is done for the next fuel stop either.

If that is so, why my average mpg is 33.7 and not 42.7?

Information regarding your partial fills will contribute to your overall average MPG.
So, while we can not gather any data from the first fill, the miles traveled and the amount of fuel entered are taken into account from the 2nd and 3rd fill to determine the average MPG.

In my case first partial fuel-up makes average mpg much lower than it is in reality. If I had partial fuel-up in the middle, error would disappear on the first full fuel-up.

But having first partial fuel-up, there will be a significant error in computation of average mpg for me for a long time... And it doesn't look like a mistake on my side, more like something is wrong in the algorithm.

Well, starting with a partial is not really recommended as you should really start with a known quantity.... a full tank. No matter what algorithms are used, the entire premise of starting to track mileage with a partial tank is flawed. This is what I would do. At your next fuel stop, fill your tank. When inputting the data, enter the date to be the same date as fill #1. Then edit Fill #1, and change the date to the current date. This will swap the fills, and the system will begin calculations with a "full" tank. Things will still be a little off as there isn't enough data in your fuel log to fully absorb a partial tank at this point, but at least your calculations will start from a known point.

Thank you for the advice. I didn't plan to start with a partial fuel-up - it was only a couple of days later that I realized that fuel-up happened to be partial.

By creating this thread I was going to point out something that can be done better in the algorithm of computing average mpg, for the benefit of many users for years to come. I don't want to manually rearrange my fuel-ups - I'm too lazy for that, and accuracy won't be better anyway.

I agree, I would have not started with a Partial-Fill.
If anything, I would've just skipped it/dropped it off altogether as it's not really doing anything for you at this point.