A pump/air separator apparatus for use in dispensing gasoline includes an air separator of the cyclone type in which air and a low percentage of gasoline are removed from the pressurized gasoline by the air separator, with the air being vented to the atmosphere and the gasoline being returned to the suction side of the pump. Simultaneously pure gasoline is delivered from the air separator through an outlet valve to a meter and then to the nozzle dispenser, and any excess of such pure gasoline is bypassed back to the suction side of the pump.