The answer is yes, but as you guessed you would have to make
corrections for the varying air pressure. One way would be to have two
pressure gauges, one at the tank bottom and one above the liquid level,
and compare the readings.Obviously, this is a situation where you want
to make sure that the wiring for the gauge NEVER gives sparks. Another
way would be to have a differential gauge, with one side open to the
atmosphere. I wouldn't recommend that because it seems like an
invitation for leaks.
I think that the density of diesel fuel runs around 0.85 kg/liter, but you should Google around to get more accurate numbers.
If the tank is sealed, the pressure inside can be very different
from one atmosphere (especially if fuel is drained or pumped from it).
My car's gas tank has a pressure that's noticeably less than one
atmosphere after a long trip. When I fill up the tank after driving all
day, I can hear air rushing into the tank when I remove the gas cap.
The two-pressure-sensor technique should solve this problem. A lot of
pressure gauges read the pressure of something minus atmospheric
pressure, because they measure the displacement of a spring-loaded
diaphragm, one side of which is open to the atmosphere. You could
arrange your differential pressure gauge on the bottom of the fuel tank
with its reference pressure pipe going to the top of the fuel tank,
closing the system.
There is a great amount of information from companies which sell
tank level gauges, and a great variety of products. Because your
application is diesel fuel, be sure to get something that is rated for
this purpose. Be careful with leaks and also the fact that fuels will
dissolve some kinds of rubber.
(published on 10/22/2007)