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This study presents a novel technique using image processing for which detection and measurement of oil contamination in water. The approach is to capture the water surface image and using an algorithm to detect percentage of oil area in the total water surface. Innovations of the proposed approach include use of inexpensive Micro-electro-mechanical-System (MEMS) camera sensor and elimination of need to have a physical contact between the sensor and water to be tested. Sobel edge detection algorithm is used for edge detection along the water surface, whereas haugh transformation is used for edge linking. Later closing morphological operations is used to fill the oil area and determine the oil contamination. Comparison is made between the two images before and after application of the purification method to reveal reduction in the oil contamination. It is demonstrated that the proposed approach can detect the oil contamination across the water surface within 0.5%.