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.
The injured people including women and school kids have been shifted to district headquarters hospital where several of them are said to be in critical condition.
Chief Minister Punjab Shahbaz Sharif expressed sorrow over the accident and ordered an inquiry to determine the cause of the accident.
Official report about the cause of the accident will be released after the inquiry by the police, however, the eyewitnesses said the tanker driver lost control over his vehicle and hit into the car due to dense fog.
Rescue teams reached at the site to shift the injured people 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.
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