E46 Peformance and Fuel economy

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Cheers for the reply. Do you think that it could be the Oxygen Sensor itself..

I went through a simliar issue with my 2003 E46 ... It was very sluggish at higher speeds ... like a cylinder was "miss firing". Poor gas mileage. After 4 trips to the dealer - replaced the Oxygen Sensor, replaced the DME, spark plugs, etc... it was determined to be the #6 Ignition Coil ... they replaced all 6 of them under warranty ... runs great since then. Getting arou d 30 MPG on average. There was a TSB released this last summer for the E46's ... not sure if your year was included, but might be worth a look.

Best of luck.