The mishap occurred when the Karachi-bound Shalimar Express train collided with the tanker stuck on the railway crossing in Shaikhupura.
Railways Minister Khawaja Saad Rafique confirmed the accident and toll, saying a probe has been launched to fix the responsibility for the tragedy in which the train driver and his assistant were killed.
"The driver of the tanker has been arrested," he said.
At least 14 passengers were injured but none of them fatally, officials said.
Officials said that at least five carriages caught fire and fire engines battled the blaze for hours to control it.
A newly-wed couple were among the survivors, which also included women and children.
"There was a huge bang and then fire. We jumped out of the window to escape," a passenger told the local media.
Train accidents are common in Pakistan. Most of them are caused due to unmanned or ungated crossings in the country.
At least seven school children were killed in the accident which occurred in Lodhran area of Punjab.
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