Exhaust smoke and water in the tank.
If there is a lot of white smoke and stays heavy, this is an indication of
water in the engine. This is a broken seal and may not be seen leaking outof the engine.
Blue smoke is worn/broken rings and worn cylinder walls. Occasionally oily coming from valve covers into engine. Can drive with this if rings are worn (low compression). Broken requires rebuilding (virtually no compression in cylinder). Broken may also show up a metal filings in oil drained from engine.
Black smoke is too rich of a gas mixture, valves can contribute to this if
they are not opening and closing correctly.
Moisture (water) coming out of the exhaust is normal. The liquid may be slightly acid as a by product of combustion. Letting water in at the gas station tank generally would not put any in your cars tank. You will know when this happens because your car will not idle and while driving you feel hesitations in the engine. It will feel like something broke. This happens frequently in northern Midwest and Eastern states during winter. When you remove the gas cap and blowing snow get in the tank (just a small amount). The car may be hard to start and runs terrible. Put in a can of “Heat” and the problem goes away.
Gas stations regularly monitor the amount of water in the storage tanks.
The gas pick-up tube is about 6 inches from the bottom (gas floats on water) of the storage tank. When the water level gets within a certain limit (about 4 inches deep), the station has the water pumped out of the storage tank. The water gets in there when they fill the storage tank in heavy rain. Between the time they open the lid and begin filling or when they are done, water can get in the storage tank. Look at a gas station and you will see colored drain covers slightly raised from the pavement. These are the fill lids for the gas storage tanks. They are raised to reduce water getting into the storage tanks. If they are not raise, water can pool around the lid and when opened they let in a lot of water.
The water coming out of your exhaust has nothing to do with the water in the gas station storage tanks. The blend of gas (a little) and the humidity and temperature of the air (mostly condensation), cause the moisture. This will be seen on cool mornings and when you first start driving, but can last the whole day.