The setting being in a remote place is important to both the plot and theme of the story.
Because Daru lives far from anything, up in the "vast expanse of the high, deserted plateau," it is too far for Balducci, the police officer, to continue bringing the Arab prisoner to Tinguit, which is another 20 kilometers away. Balducci notes that it has already taken him:
One hour to do the three kilometres from El Ameur!
Because of the unrest back home, Balducci has to return quickly. He therefore assigns Daru the job of handing the prisoner over to the authorities, which Daru doesn't want to do for fear of retaliation from the Arabs.
Despite hoping the prisoner will escape—and even leaving him on the road alone—the Arab ends up in prison. This poses a threat for Daru. Suddenly the lonely, remote landscape means he is vulnerable to attack from vengeful Arabs:
In this vast landscape he had loved so much, he was alone.
If the setting were not so remote, Daru's danger would not be so stark.
Humankind's essential loneliness and alienation is a main point of this story. Daru's existential aloneness is accentuated by the lonely setting—but the story also makes the point that we can't escape being bound up with the fate of other people. Despite his attempts to live outside of the mainstream in a remote place, Daru ironically is drawn into the life of his society in ways he does not like.