In this paper, a new fuzzy logic (FL) model is proposed for assessing the health status of power transformers. In addition, the detection of incipient faults is achieved where two or more faults exist simultaneously. The process is carried out by integrating a fuzzy logic model with the conventional International Electric Committee (IEC) ratio codes method. As transformer oil insulation deteriorates, excess percentages of dissolved gases such as hydrogen, methane, ethane, acetylene and ethylene are induced within the trasnformer. The status of oil health is generally assessed using these gas concentrations. Therefore, in the proposed model, 31 fuzzy rules are designed based on the severity levels of these gases in order to determine the health index (HI) of the oil. Similarly, any incipient faults along with their severity are also detected using the proposed fuzzy logic model with 22 expert rules. To validate the proposed fuzzy logic model, the data for dissolved gases in 50 working transformers operated by the Himachal Pradesh State Electricity Board (HPSEB), India, are collected. Over the years, calculations for the health index have been performed using conventional dissolved gas analysis (DGA) interpretation methods. The shortcomings of these methods, such as non-reliability and inaccuracy, are successfully overcome using the proposed model. The detection of incipient faults is normally performed using key gas, Rogers ratios, the Duval triangle, Dornenburg ratios, modified Rogers ratios and the IEC ratio codes methods. The shortcomings of these conventional ratio code methods in identifying incipient faults in some typical cases, ie multiple incipient fault cases, are overcome by the proposed fuzzy logic model.