A system for monitoring fuel consumption and optimizing refueling of a vehicle. The system includes a fuel level sensor designed to be mounted on a fuel tank. The fuel sensor has a transducer, such as an ultrasonic transducer, for generating a distance signal that represents the distance between the sensor and the surface of the fuel in the fuel tank. A processor coupled to the transducer is programmed to convert the distance signal to a percentage of capacity signal, calculate the volume of fuel within the fuel tank, and create a message that includes information regarding the volume of fuel in the fuel tank. The processor of the fuel level sensor is coupled to a network that may include a dispatch terminal, a fuel optimization server, and a fuel-price-by-location service. The network calculates an optimal location for refilling the fuel tank and a route to travel to the location. It broadcasts a message containing the refueling and route information to the vehicle information system, and devices coupled to the vehicle information system then display the message to inform the driver of the vehicle when and where to refuel.