Seven people are feared dead according to an eye witness at the scene.
It is said the tank overturned last night and villagers have been siphoning the spilling petrol.
That spot has been a black spot for along.
At one time a fuel tank overturned there and burnt over 100 people and destroyed lots of property including animals.
Stories Continues after ad
The eye witness said that one fire brigade truck rushed to the scene from iganga town but had less water to put down the fire.
Up to now the truck is still burning and traffic flow has been distablized now for close to an hour.
Details to follow.