A marine fuel system and method includes receiving a fuel level signal from a fuel level sensor for a marine fuel tank on a marine vessel and discriminating between condition A comprising an increase in the true amount of fuel in the fuel tank above a given level, and condition B comprising a transient increase in the level of fuel in the fuel tank above the given level due to vessel movement, which may include movement due to waves, rough water, people moving on the vessel, and so on, while the vessel is stationary at a dock or filling station and being re-fueled. An alert signal is output in response to condition A and not to condition B.