The spi system is a piece of **** is the first problem.
There is very blatantly something wrong if it is hunting and smelling of petrol.
It's very true zirconia and titania lambdas won't work until 300C has been attained, this can take as much as 45 seconds on a cold engine, other cars use a better sensor called HEGO, heated exhaust gas oxygen sensor, same as you have but has a tiny heater circuit within it so it is up to temp quicker.
Running rich, it will not be anything remotely like a older car with a carburettor, the ecu will most likely ignore the lambda reading totally for a timed period if under a certain temp, known from the coolant temp sensor, and subsitute a fixed value under warm up.
That economy is excellent, so you know the lambda is okay, so I'd look elsewhere, I get 36-38 out of a 1.4 MPI auto on local runs, so yours sounds about right.
It may well be the SPI unit needs cleaning, ultrasonically that is, a very common problem on these, and well worth doing.
tabetha