I think it is part of the venting system for refueling and I am pretty sure it can be removed. Just make sure the vent tube in the filler neck on the gas tank and vent tube inside the upper filler neck are clear and connected to each other with the special rubber hose.
FYI, I have those rubber hoses in stock as I just dealt with a repro gas tank fiasco on a 1976 Volvo 264 which has a similar gas tank.
The repro gas tank did NOT have the plastic tank, nor did it have the metal tube inside the filler neck. I installed the tank that way and it was very difficult to fill requiring manual operation of the fuel filler nozzle at the gas station at the lowest possible flow and even then it would auto shut off like the tank was full even though it wasn't.
I removed the tank and had the metal tube from the original gas tank transplanted into the repro gas tank filler neck along with a new rubber hose and I was able to easily fill the gas tank afterwards.
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Eric Hi Performance Automotive Service (formerly OVO or Old Volvos Only) Torrance, CA 90502 hiperformanceautoservice.com or oldvolvosonly.com
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