The sensor uses capacitive principle. The capacitive sensor consists of inner and outer electrodes and circuit (equivalent to two plates of the capacitor) . When there is water in oil, the capacitance value changes significantly between the inner and outer electrodes for the oil’s and water’s dielectric constants differ a lot. Sensor circuit generates a stable high frequency square wave. When the capacitance value changes, the square-wave frequency will change too. Though magnifying and comparing the signal , it gives relative warning signal.