LAHORE: An overturned oil tanker exploded killing at least 123 people in Pakistan on Sunday, as most of the victims had gathered round when spilt fuel from the stricken vehicle ignited, officials said.

The tanker overturned after trying to make a sharp turn on a highway on the outskirts of the city of Bahawalpur. A large crowd of people gathered at the scene when it caught fire and exploded, rescue workers said, adding about 80 people had been injured.

"People of the area and passersby had started gathering fuel when the tanker exploded, burning everybody on and around the spot," provincial government spokesman Malik Muhammad Ahmed Khan told Reuters.

Serious burn victims, several in critical condition, were airlifted by helicopter to hospitals in Bahawalpur and nearby cities for treatment.

"According to the initial reports, somebody tried to light a cigarette, and when the spilt fuel caught fire, leading to the tanker's explosion," Jam Sajjad Hussain, spokesman for the rescue workers service said.

Firefighters fought the flames for over two hours before extinguishing the fire.

The prime minister's office said the Punjab provincial government had been directed to provide full medical assistance.

"Prime Minister Muhammad Nawaz Sharif has expressed deep grief over the heavy loss of life in the unfortunate accident of oil tanker fire at Ahmad Pur Sharqia, Bahawalpur," the statement said.