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Hi Dan


The wire you have photographed is, as Richard pointed out already, the oil pressure switch. It is simply wired to the instrument cluster so that if the engine oil pressure drops too low the warning light illuminates. The ECU does not know the status of the oil pressure and therefore the oil pressure sensor wire is not likely to be the cause of any other issues.  The easy way to fix this issue is to use a pair of pliers to push the contacts of the loom together, thereby creating a firmer grip of the oil sensor.


The symptoms you have described COULD be due to bad fuel quality or water in the fuel.


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