When Sadio Mane hit the post, City defender John Stones' attempted clearance went straight onto goalkeeper Ederson's head.
But parity lasted just eight minutes as Sane fired City's victor off the post, leaving Liverpool to come to terms with their first league defeat since May 6.
"We knew it was going to be a very tough season and there will be ups and downs and Thursday was obviously a down", said the Netherlands worldwide.
"In a lot of moments it was really wild, a lot of rusty moments when somebody kicked the ball out, a blue one, a red one, and you think 'what's that?'".
The 24-year-old was outstanding with and without the ball as City cut Liverpool's lead at the top of the table to four points.
Speaking to beIN Sports, he had said, "People said I had a hard season but I don't agree with that".
Defeat saw Liverpool ultimately pass up the chance to go 10 clear of City, something that, in the eyes of many, would have effectively ended the hosts' title hopes.
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City's victory meant they are now just four points behind Jurgen Klopp's side, with a total 51 points left to play for this season. You could see in every tackle, every pass, that everyone was really focused on the game, to not make mistakes, as we all know how hard it is to play against big teams with big players.
"We are disappointed we lost but there is no reason for panic".
"I am proud of them (the players), but not just today".
Frustrated after being left out of Germany's World Cup squad, Sane began City's first three league games on the bench and was then left out entirely for the trip to Newcastle amid claims Pep Guardiola was concerned by the youngster's focus in training.
"We want to finish the season as good as possible and that's our right, we can do that".
"We are always going to fight until the end, it doesn't matter what the result is", he said.