My father sold gas back in the day. He told me a story of an incident where he accidentally sold water instead of gas. When the supply tanker was filling up the underground reserves, someone forgot to close up the underground reserve. A heavy rain came overnight and water infiltrated the tank.

It was an accident. Repair costs for customers were handled through the gas station's insurance.

Water in the gasoline is an issue in stations that have above ground tanks. When the tanks are mostly empty they’re filled with air, and the changing temperature means water condenses out of the air and ends up in the gas. I used to live in a rural area with a gas station known for watery gas; if we wanted to run a chainsaw we’d get gas from farther away to avoid damage.

Just saw this comment but wanted to respond.

Yes this is a thing and happens semi-often.

Keep in mind I was servicing over 75 locations and each had at least 3 tanks.

The most common way for water to get into the tanks was through the fill ports that the fuel delivery drivers filled the tanks with.

Seals could go bad, or the driver could forget to close a lid 100% of the way. Couple that with high water from rains and you’d typically get a high water alarm.

I think our system was setup to alarm if there were more than 3 or 4 gallons in a tank. These tanks are enormous. I don’t remember the capacity but they had many thousands of gallons of fuel.

Water goes to the bottom of the tank naturally and sets off an alarm. This alarm also stops the pump from running.

We’d call out a vacuum truck to pump the bottom of the tank (usually this cost A LOT of money. $1000 for 15 minutes of work)

Then we’d fix the entry point where water came in. If the alarm cleared on the system, we could turn the pump back on.

Typically the submersible tank pumps pull fuel a few inches off the bottom of the underground storage tank. You'd have to have a very high water-level for the pump to pull water.

People take the possibility very seriously with aircraft, so I inferred that it's a real, but rare, problem.

It's pretty much gone away as a problem for cars, there's been design changes to vehicle fuel tanks, and the use of ethanol as an oxygenate means that water doesn't really build up over time (the ethanol allows the water to mix into the fuel; 'dry gas' is often just a jug of alcohol)