Express News reported that fire erupted in the tanker, following the collision, engulfing two cars and a rickshaw carrying school kids, which were passing by it on the highway.
The accident happened at about 9:20 a.m. local time in Mananwala area of the Sheikhupura district located in the country's eastern Punjab province.
Rescue teams reached at the site to shift the injured to the hospital and recover bodies from the vehicles.
Fire fighters were also called in to extinguish the huge fire triggered off by the explosion.
Those injured included women and school kids have been shifted to district headquarters hospital where several of them are said to be in critical condition.