I copied this from Bob Sikorsky's column a while back:
"Whenever a vehicle experiences a sudden decrease in fuel economy, one of three items is likely to be the culprit.
First, an oxygen sensor gone haywire can cause a sudden and dramatic decrease in fuel economy.
Second, the coolant-temperature sensor may be out of whack. If this sensor malfunctions, the result will be similar to that of a bad O2 sensor, a sharp decrease in fuel economy.
Third, a failing EGR (exhaust gas recirculation) valve causes the engine to burn more gas than is necessary. More gas burned to travel the same distance equals, yes, a decrease in fuel economy.
Other sensors that may play a part in the fuel-economy equation include the throttle-position sensor and the EGR-position sensor. But my money says that it's one of the first three that is causing your sudden decrease in MPGs."