"It is an act of sabotage, a serious terrorist act aimed at harming the interests of the nation and endangering the population," the interior ministry said on Twitter.
Emergency services brought the blaze under control after it was discovered early Saturday, it said, adding that national oil company Bapco had turned off the flow of oil.
The fire service also evacuated homes in the nearby village of Buri, 15 kilometres south of Manama, it added.
Bahrain, a Shiite-majority kingdom ruled by a Sunni dynasty, has seen sporadic violence since the repression in 2011 of a protest movement demanding a constitutional monarchy and an elected prime minister.
Authorities have since tightened their grip on dissent, jailing hundreds of protesters and stripping a string of high-profile activists and clerics of citizenship.
The government denies it discriminates against Shiites and accuses neighbouring Iran of stirring up tensions, which Tehran refutes.
Bahrain is home to the US Navy's Fifth Fleet and a British army base is currently under construction.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)