Fuel is able to be smelled in even very small and highly diluted concentrations. Our noses often act as our first line of defense to warn us of contamination well before it is at dangerous levels. Much the same way you can sometimes smell trace amounts of garbage in an area or mold in your fridge, our sense of smell is a way to warn us that something may be wrong.
Taste is the another line of defense the body uses to protect us from consuming things that are bad for us. Fuel can be smelled and tasted while still at levels well below longterm concern to health. Having an emergency back up supply of water is an important precaution to take to put your mind at ease if your water smells/tastes odd.