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Miles per gallon drop....HELP 850 1995

Hello,

I recently bought a 850 Turbo and I was averaging about 21 mpg. My check engine came on about a week ago and since then my mpg dropped down to about 12. And my exhaust smells really rich. Could this be an oxygen sensor problem??? Also when I use my turbo boost, soon after there is a rotten egg smell. A friend told me that's because my fuel is too rich and the cat is doing it's job by burning it off. Is this correct?

Please I need some guidence, I really don't know much about volvo's.

Thanxs






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