Amoco yesterday put itself on both sides of the battle lines in the fight for the declining gasoline market, offering a new, expanded service credit card in addition to its nationwide discount-for-cash program.

In a bid to lure credit customers, Amoco said it will provide customers who pay a $20 annual fee with an Amoco MultiCard that can be used for hotels, car rentals and instant cash, as well as traditional service station purchases, at the credit rate. At the same time, the company announced that sales volume had increased from 7 to 31 percent in markets where it first tested providing discounts for cash.

"There isn't any one side of the line," said Amoco marketing vice president Sam Van Sickle. "Our market research tells us we have both kinds of customers, sometimes in the same individual."

"We're still vitally interested in our credit card customers, who tend to be more loyal to the brand," he said.

Those customers will have the option of retaining their regular Amoco credit cards, of which there are about 11 million; paying $30 annually for the Torch Club card that Amoco and Diners Club have offered for about 16 years, or the MultiCard.

The new card will provide credit at Ramada Inns, Quality Inns, Best Westerns and Howard Johnsons and their restaurants, plus personal check cashing privileges at those motels up to $50 a day.

It also provides a 10 percent discount and charge privileges with National Car Rental, emergency cash advances by wire of up to $100, travel insurance and coupons for discounts at other motels and two meals for the price of one at a variety of restaurants, including Kentucky Fried Chicken and McDonalds.

All three types of cards will offer revolving credit privileges for standard gasoline station purchases except in Maryland. Because of a state law that prohibits oil companies from assessing dealers credit card fees if it imposes finance charges on credit cards, Amoco has revoked revolving charge privileges in Maryland, choosing to keep its discount-for-cash program instead. The new cards will be available in Maryland at the same price without revolving credit.