why does oil temperature rise when I put food in the pan I tried deep frying in oil using a thermometer for the first time today, my usual method is to  test temp with a small amount of food.

I was using a wok filled 1/2 full with vegetable oil.  I heated it until the thermometer read 350 deg F.  I then put in some Somosa that were frozen. A lot of steam and bubbles were created. I lowered the gas flame and noticed that the temperature had risen to 390 degF.  My instinct tells me that the oil temp was likely to be really at 390 because the Samosa cooked faster than I expected.

I tried this a few times and consistently got the same results even with non-frozen food. The temperature did not change if I stirred the oil.

Could there be something wrong with the themometer?. I calibrated it with boiling water before I started.

Have I discovered a new form of energy?  :)
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..