Specific gravity is a weight measurement. If you take the weight of your diesel and divide it by the weight of water it will give you the specific gravity of the diesel. This will change with the temperature of the diesel as the colder it is the denser it gets. Once it gets down to 14F it gets so dense it starts to gel IE it gets so thick it will not flow through the filters.
Fuel is sold wholesale using the temperature or the specific gravity of the fuel and calculated back to 60F. In other words when you buy 7000 gallons of diesel in the winter you might be charged for 7500 gallons but if you bought this same 7000 gallons in the summer you might only be charged for 6500 gallons as it expands and contracts with the temperature IE the specific gravity changes. The tool you are using measures this amount so you know how many gallons to charge the person for.
If you want to know if you have #1 or #2 diesel you need to know the viscosity. IE how thin are watery it is. (I use watery not as how much water is in it but rather how thin it is) #1 is thinner than #2 IE it does not get thick enough to plug the filters as fast. You need a falling sinker high-pressure viscometer to measure the viscosity.
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