The oil tanker coming from Karachi and headed to Lahore overturned early this morning on the national highway at the Ahmedpur Sharqia area of the Bahawalpur district, some 400 km from Lahore, after a tyre burst.
The fire was apparently caused by someone who lit a cigarette after people from nearby localities gathered on the highway to collect spilt petrol, officials said.
District Coordination Officer (DCO) Bahwalpur Rana Salim Afzal termed it a "huge tragedy" in the history of Pakistan.
"At least 123 people were killed before getting any medical help while the rescue officials shifted more than 100 injured to the district headquarters hospital and Victoria Hospital in Bahawalpur where the condition of most of them is critical," Afzal said, adding some 50,000 litres of petrol spilled from the oil tanker.
Afzal said women and children were among the victims.
The death toll later rose to 149 and rescue official Jam Sajjad said most of the dead bodies were completely charred and they will be identified only by DNA tests.
"My cousin told me to pick bottles and come out of the house. When I came out of the house I saw many people rushing towards the highway and some going there by motorcycles. Me and my cousin Rashid reached the highway and joined the people busy in collecting the petrol spilling from the tanker.
"Suddenly the tanker burst and the people gathered near it were burnt alive. Rashid and I were a little away from the tanker therefore we are alive," Hanif said.
The Punjab government said three helicopters were shifting the critically burnt people to Multan's combined military hospital and Nishter Hospital for providing better health facilities.
Regional Police Officer Bahawalpur Raja Rifat said the motorway police personnel had reached the spot when the oil tanker overturned.
"The people from nearby village Mauza Ramzan had also gathered there. The police personnel asked them to leave the place but they started collecting petrol. Suddenly the tanker exploded and within seconds the fire erupted giving no chance to the people present there to leave the place," Rifat said.
"Most people reached the site on motorcycles to collect spilling petrol," he said.
Punjab Chief Minister Shahbaz Sharif directed the authorities to ensure best medical treatment to the injured. He also sent his chopper for shifting the injured to Multan hospitals.
Prime Minister Nawaz Sharif, President Mamnoon Hussain, Pakistan Tehreek-e-Insaf chairman Imran Khan and Pakistan Peoples Party chairman Bilawal Bhutto condoled the tragedy.
Army chief Gen Qamar Javed Bajwa ordered the Army to assist the civil administration in the rescue effort.
Army helicopters have been deployed in the rescue operations.
The oil tanker tragedy comes about two years after 62 people, including women and children, were killed in a fire after a coach collided with an oil tanker travelling on the wrong side of the road, on the outskirts of Karachi.
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