Wednesday marks the beginning of the end for leaded gasoline -- and the end of bargain fuel prices for some 40 million drivers.

Under orders from the federal government, the element that has helped protect, power and quiet car engines in this country since 1923 will all but disappear from motor fuel beginning Jan. 1. And by 1988, there is a good chance it will be banned altogether.

Lead works wonders in gasoline, but unfortunately it's poisonous. Health problems attributable to high blood-lead levels include anemia, mental retardation and permanent nerve damage. Leaded gasoline is responsible for about 80 percent of all lead emissions in the air, which means that it is a major cause of lead-related diseases, according to the Environmental Protection Agency.

So the federal agency met little objection earlier this year when it imposed a major reduction -- from 0.5 grams per gallon to 0.1 gram -- in the amount of lead that refiners can put into gasoline.

For the past decade, new gasoline-powered cars and trucks have been required to burn unleaded. However, lead-gas vehicles, mostly pre-1975 models, still constitute 26.5 percent of the 155 million cars and trucks operating on U.S. roads, according to figures from Detroit-based Ward's Automotive Research. That adds up to 30 million cars and 11 million trucks.

The cars are going to scrappage, to auto graveyards around the country, at the rate of approximately 2.5 million vehicles per year, according to Dennis Virag, director of Ward's automotive industry analysis, while trucks tend to last a little longer. At that rate, significant numbers of these vehicles will remain on the road into the mid-1990s.

Owners of these "lead sleds," who have happily been paying as much as a dime less per gallon, will bear the brunt of the burden of change to a virtually lead-free era, said Dan Lundberg, president of Los Angeles-based Lundberg Survey Inc., an oil-industry analysis and market-research firm.

"It isn't so much that there won't be enough leaded gasoline to go around, or enough lead in gasoline to give it punch. They key thing to look at is that the owners of the nation's oldest fleet of vehicles -- the fleet heading toward scrappage -- will be picking up the tab" for the new era, Lundberg said.

Oil company officials agree that enough unleaded and low-lead gasolines will be available to meet the needs of all passenger-vehicle owners for the foreseeable future. Indeed, some oil executives, particularly those at Amoco Corp., said that the nation's entire passenger-vehicle fleet could run on unleaded gasoline.

"Amoco doesn't believe that cars need lead," said Patricia D. Wright, spokeswoman for Amoco, the nation's biggest producer of unleaded motor fuels.

Wright said Amoco's long-term field experience with unleaded fuels and supporting research justify her company's belief that "older cars can run quite well on unleaded gasoline at legal speeds and under normal [passenger, cargo and trailer] loads."

But General Motors Corp., the country's biggest auto maker, has a more conservative view. For all of its pre-1971 cars and trucks, GM recommends that owners use the new low-lead gasolines that will be on the market after Jan. 1. "These vehicles need leaded gas to lubricate exhaust valves," GM said in recent national advertisements on the lead phase-down issue.

"Lead raises octane ratings and helps avoid 'knocking' and 'pinging.' The lead is most important during continuous high-speed, high-load conditions such as towing a heavy trailer or large boat over a long distance.

"In a pinch, you can even use unleaded gasoline for normal driving," the GM ad said.

GM recommended using unleaded gasoline in all post-1974-model cars and trucks. Under no circumstances should the new low-lead grades be used in those vehicles, the GM ad said.

"The new lower-lead limits are still too high" for post-1974 vehicles. "Lead in gasoline will harm the emission-control system" in those cars and trucks, the GM ad said.

Ford Motor Co. and Chrysler Corp. officials said that while they generally agreed with the big auto maker's fuel-use recommendations, they didn't feel the ad campaign was necessary.

"I think GM is trying to cover itself" because it has the largest fleet of old vehicles operating in the United States, a Ford official said.

Said a Chrysler spokesman: "We aren't overly concerned about any likelihood of problems arising from using unleaded fuels" in cars designed to run on leaded gasoline.

"We are aware that there is a general concern that taking the lead out of gasoline will lower the octane and increase the knocking effect" in older car engines. But properly proportioned additives such as ethanol or methanol, or super unleaded premium gasolines, might be enough to provide the right amount of octane, the Chrysler spokesman said.

Octane is a measure of how smoothly and completely air-fuel mixtures burn in engine combustion chambers. The higher the octane, the smoother the burn. Uneven burns cause engine noises, knocks and pings, and reduce engine performance. Smooth burns yield more power.

Leaded gasoline typically comes from the pump with an 89 octane rating. Regular unleaded usually has an octane rating of 87. Premium unleadeds, which lately have been flowing into the market, have octane ratings ranging from about 91 to 95.

Regular leaded gas is usually cheaper at the pump than unleaded. For example, a recent survey of Washington area gasoline prices by the Potomac division of the American Automobile Association showed that self-serve leaded grades were selling at an average $1.13 a gallon, compared with $1.20 a gallon for unleaded regular.

But the widespread view within the oil industry is that the new low-lead gasolines will cost more than regular unleaded. The reason? More stringent refining processes -- more energy, more expensive equipment, more expensive additives -- will be needed to get an 89-octane, low-lead gasoline.

"I would anticipate that low-lead will cost more money" at the pump because "it's going to take more money to produce it," said William Snyder, vice president of administration for Baltimore-based Crown Central Petroleum Corp., which sells motor fuels in the East and Southeast. Edwin P. Mampe Jr., Crown's director of government affairs, agreed.

The gap between the wholesale prices of leaded and unleaded gasolines produced on the Gulf Coast and distributed along the Eastern Seaboard is closing already, Mampe said.

For example, Gulf Coast leaded gasoline was selling at a wholesale price of 68 1/4 cents per gallon on Dec. 11, compared with 68 1/2 cents a gallon for unleaded, said Mampe, citing industry figures. On Dec. 17, unleaded and leaded gasolines produced there wholesaled for the same 64 cents a gallon.

But the bad news for consumers of leaded gasoline is good news for the EPA, which contends that 16 percent of vehicles requiring unleaded gasoline are being misfueled with the leaded grades. Eliminating the price differential between leaded and unleaded gasolines probably will reduce the incidences of misfueling, Mampe said.

Raising low-lead pump prices above the prices for unleaded conceivably could get rid of leaded grades altogether, some oil industry officials said. Some observers speculated that the lower price of leaded gas has encouraged drivers to hold on to their older vehicles. As the advantage disappears, they said, scrappage of the old cars could accelerate, drying up the market for the low-lead fuel. If that happens, refiners will stop making it.

But industry officials cautioned that all future gasoline-price predictions could be upset by a provision in EPA's rules that has allowed refiners who have used less than the legal maximum amount of lead during 1985 to "bank" the lead they could have used but didn't.

Under the new rules, refiners can add this lead back into their leaded product -- up to 0.3 grams per gallon -- during 1986 and 1987 or sell the credits to other refiners.

Oil companies with big lead banks might use the extra lead to produce leaded gasolines at low costs to the consumer.

But many of the nation's big oil companies already have converted most of their capacity to unleaded-gasoline production. As a result, those companies seem likely to find it more profitable to sell part or all of their banked lead to refiners whose near-term earnings depend on the continued production of leaded fuel.