Time Series processing using fft
Is my thought process correct?

No. Frequency domain filtering is difficult and even if you get it right, I sincerely doubt that low-pass filtering will solve your problem
Your data is very noisy. I looks like there are two noise sources: one with a &quot;quantization&quot; step of about 20 plus some smaller noise overlaid. Hard to tell without further analysis.
You haven't told us yet, what you actually want to get out of the analysis, so it's hard to give advise. Low-pass filtering will smear out your &quot;refuel&quot; transients a lot. I'm guessing, your best shot would be to build a parametric model and do a piece-wise least squares error fit, but again, you need to tell us what you actually want to achieve.