A reference capacitor is coupled in parallel with a capacitor of which the size thereof is variable and an oscillator is used to alternately charge and discharge both capacitors between first and second voltage levels. The absolute magnitude of the current flowing through the reference capacitor, which varies in proportion to the size of the variable capacitor, is detected which is indicative of the variations in size of the variable capacitor. If the variable capacitor is disposed in the fuel tank of a vehicle, water in the fuel will cause the effective capacitance value of the capacitor to increase which reduces the absolute magnitude of the current that is detected. The absolute magnitude of the detected current can be utilized to indicate excessive water levels in the fuel.