I had the same concern about fuel "mixing" with electricity. A while back I posted these same concerns on another web page (British Car Forum" and got these replies from various people...
there is no inside "seal" at the pivot point. The sliding contact & the resistance winding are often operating in gasoline
theory is that there is too little current (typically 6 milliamps) flowing in the circuit to create a spark. It must be true. I've never heard of a gas gage blowing up a car.
another reason the sender never causes problems is that the fuel/air mix in the tank is way too rich to ignite. I like that low current explanation better!
nearly every car built today also has the electric fuel pump immersed in the gas tank, brushes and all, since it needs gasoline to help lubricate it and cool it. The gas gauge is a low current device, and not likely to spark, but since the mixture is much too rich to ignite it's not a problem
My car hasn't blown up..... yet.