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That's the ground wire to complete the circuit to the oil level gauge. The other wire to the left (black if I recall) is the signal wire. Gauge may still work if the level sensor and gauge are both grounded to the body. The level sensor is attached to the tank, which is hard-mounted to the body (no rubber cushions), so there is a likely path to ground, but the wire makes it certain.
If that is oil (hard to tell), you need a new gasket on the level sensor. Pretty straightforward to R&R.
--Dave
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1985 Carrera 3.2 • Prussian Blue Metallic
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