It looks like a ground terminal but I cannot see why there would be one since the sender screws into the block and gets it ground from there. I think it is because that sender is used on many different cars that have different style connectors.

The connector on my 1988 was a dual style. It had a typical push on on the end and a slide on on the side. The push on was what was used for my old oil pressure switch. With the new sender I used the side of the connector and slid it on.

[Linked Image]

[Linked Image]