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You don't say what year your 240 is. For the earlier float arm type of sending unit, your symptoms are likely elsewhere as I would expect at least some movement or a steady near zero gauge reading in the event the sender rheostat was worn out or the float ball got water-logged. For the later ones I believe the sending unit was the barrel type. For that type, apart from electrical problems, the fuel sending unit float disk could be stuck either due to wear or possibly even foreign matter. Next time you do a fill-up, find the hardest speed bump you can. Any change in the reading? You might also try the same thing on a near empty tank. You can also try removing the tank access hatch in the trunk under the carpeting between the wheel wells. With something like a wood stick and hammer, firmly tap around just inside the sending unit collar (ie. give it a good beating). Any change? Otherwise go looking for electrical problems such as damaged and shorted wiring (including the ground wire near the access cover and the wiring leading to the connector in the left storage well). Only after that would I go looking at the instrument panel or gauge. If the sending unit is the problem, get one from a wrecker. You don't want to know Volvo prices for a new one. They're fairly rugged (except for later 940's with the 75 litre tank) so age doesn't matter a whole lot as long as it isn't physically damaged and all the hoses and nipples are okay.
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