why does oil temperature rise when I put food in the pan
It depends on the type of the thermometer and the position of the sensor inside of it.  In all likely hood, you're not measuring the oil temperature but the air/steam above the surface.  

When you put the food in, it produces more flow due to the water evaporating from the food and leaving the oil and registering on the sensor.

This is sometimes tricky, because some sensors are right at the tip and if you let it sink to the bottom you have yet another problem of reading the burner contact point and not the fluid.

Your best bet is to try and keep your sensor probe somewhat horizontal and almost fully submerged..