This part is the Oil Pressure Sender Unit. It is bolted to the engine block and is responsible for the dashboard oil light for oil pressure. If the Sender Unit is leaking, the car is generally thought to have serious engine block gasket problems. Replacing the leaky Sender Unit could solve the oil leak problem.
If the Sender Unit is faulty in some other way, for example the diaphragm isn’t working properly, the oil light might not come on when the oil pressure is low. Use your intuition when you start the car about how the oil light should work. The light should be on at the first few seconds of the engine’s starting; then go off after the engine has been on a little bit. The idea is that you want to keep enough oil in the engine and that the Sender Unit is working to help you with that.
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Whenever there is an oil problem, a good mechanic will almost always start with a Sender Unit check-up. A lot of trouble could be avoided if this inexpensive part were found to be faulty.
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