"Labourers were working on the tanker when the blast took place. Soon, the tanker caught fire that killed five labourers and their bodies were charred.
Two persons, who were seriously injured in the incident, were admitted to a local hospital," Bhavnagar SP Mahendrasinh Pawar told PTI.
The cause of the blast was yet to be established and officials of the Forensic Science Laboratory had started their investigations, he said.
To a question regarding fire-safety measures on the tanker that was being broken down, Pawar said, "As of now, we have no idea whether the labourers had a safety kit with them or not.
"We also do not know about the fire-safety measures inside the oil tanker. But, if any criminal negligence is found on the part of the owner who had purchased the tanker, we will take necessary action," Pawar said.
The tanker was of Portuguese make and brought here by a local company.
The deceased have been identified as Hiralal Chaudhary (28), Ajay Chaudhary (22), Ram Prasad (35), Sanjay Yadav (28) and Subhash Yadav (28), all hailing from Uttar Pradesh, while the injured are Ram Chandra (25) and Dharmendra (37).
Alang, which is the largest ship breaking yard in the world, has often generated controversy about poor working conditions and the impact of ship-breaking on the environment.