The factory KTM rider topped the 709km stage, beating teammate Edgar Canet by 3m36s.
With Tosha Schareina third for Honda and 3m47s off the chart-topping pace, Sanders was able to eke out his advantage over the Spaniard in the overall classification.
The seventh stage saw riders take on rocky areas and dune sections. The leading Australian benefited by being the ninth rider onto the course.
He navigated the tricky terrain without much drama, scoring his fourth stage win of the Dakar Rally.
His lead of 15m33s represents the biggest gap to date in the race.
“That was a pretty fast stage, and technical at the start while it was raining,” said Sanders.
“I stayed fully focused all day as the navigation was tricky, so it was a much better day for me.
“We adjusted the bike to suit the sand more as well, which really helped in the dunes.
“I’m feeling confident, and as a team we’re doing everything we can to put ourselves in the best position possible to retain the lead for the remaining stages.”
While it was all smiles for Sanders, it was agony for Andrew Houlihan – whose Dakar Rally came to a premature end after crashing in Stage 6.
He underwent CT scans where it was discovered he’s suffered a fractured collarbone, fractured scapula, and three broken ribs.
“I was hoping the injuries were not too bad and I could continue but it’s not to be,” Houlihan wrote on social media.
“I had some more mechanical problems in the dunes and then when trying to roll start my bike down a very steep dune it all went wrong.
“I managed to ride another 40km to the next checkpoint and then was helicoptered out.”
The only other remaining Australian in contention is Toby Hedrics, who sits 21st overall and ninth in class – 3h33m2s off the lead of Sanders.
“I knew today was going to be tough, and it was brutal out there — over 800 km in total,” said Hedrics.
“I had a good day going before the refuel, sitting well inside the top 20, but once we hit the dunes, I just couldn’t get a flow going.
“I had a fall, which resulted in me bending my clutch lever, and that didn’t help either.
“We’ll give it another go tomorrow, and hopefully, I can start to get a better feel in the dunes.”
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