O2 (oxygen) sensor is to sense the percentage of oxygen in the exhaust gas, it indicates whether the combustion is proper and complete, if not, the engine computer will adjust the air-fuel mixture (by varying amount of fuel injected) accordingly until the combustion process is correct to give you the best performance and lowest nasty exhaust gas emission... So, if the sensor if not working you might be running rich, there goes all your unburnt petrol, into the exhaust, wasting $$$