A dense mixture of granules and liquid often shows a severe shear thickening and is called a dilatant fluid. We construct a fluid dynamics model for the dilatant fluid by introducing a phenomenological state variable for a local state of dispersed particles. With simple assumptions for an equation of the state variable, we demonstrate that the model can describe basic features of the dilatant fluid such as the stress-shear rate curve that represents discontinuous severe shear thickening, hysteresis upon changing shear rate, and instantaneous hardening upon external impact. An analysis of the model reveals that the shear thickening fluid shows an instability in a shear flow for some regime and exhibits the shear thickening oscillation (i.e., the oscillatory shear flow alternating between the thickened and the relaxed states). The results of numerical simulations are presented for one- and two-dimensional systems.