The distance charge of 33 cents per kilometre covers more than just fuel. Every kilometre driven also costs the owner in tyres, servicing and general wear and tear. This distance charge compensates the driver for all the running costs associated with your driving.
Although rental car companies often don't have distance charges like this, renting a car from your neighbour is usually still cheaper once you take into account excess reduction, daily fees and extra charges for roadside assistance and carbon offsetting. Plus, you get the convenience of being able to pick up and return the car 24/7 without having to travel to the hire car depot, and there's no paperwork to fill out.