The object depicted in your photo is the rollover valve. It is there in case the car turns over in an accident and prevents the loss of fuel through the vent line.

Hard to tell from the photo, but you either need to replace the valve (which is plastic) or the hoses on either side, or both.

I've had leaks show up in these hoses on two of my cars (the valves themselves were not the problem). The leaks were found during the portion of the California smog testing which checks the integrity of the fuel evaporative system.

Tatra Mike
San Diego, California

1985 244 "Alfsen" (wife's car - the good one)
1984 245 "Buster" (the kid's car, now sold)
1985 245 "Cosmo" (parts car, sold off for move to WA)
1985 245 "Daisy" (back seat down, full of tools, the work truck)
1985 245 "Earl (CA vehicle 'retirement' program)