Abstract: An optical liquid measuring system for measuring the amount of flammable liquid in a storage tank consisting of a pair of encoder disks that are operatively connected to a pair of floats through a pair of pulley systems. The floats are designed so that the first float will float on top of flammable liquid such as gasoline, and the second float will float on top of water. Optical encoder reader heads or optical connectors are located proximate to the respective encoder disks to receive light that is reflected by or transmitted through the encoder disks. The optical connectors include a plurality of optical fibers that receive the light from the encoder disks and transmits signals to a CPU. The CPU then takes the information derived from the received signals and uses an algorithm to accurately calculate the amount of gasoline and water in the storage tank.