The explosion Tuesday morning at Agbogbo, a village near the coastal city of Lagos, occurred on a stretch of pipeline in remote swamp waters, and news of it did not filter out until Wednesday morning.
The pipeline carries gasoline, imported for domestic use, from the Lagos port to inland depots across the country.
"We counted a total of 34 bodies at the scene," Lagos police spokesman Frank Mbah told reporters.
Nigerian Red Cross official Abiodun Orebiyi confirmed dozens of deaths and injuries, but said the final toll was not yet clear.
Most of the victims were women and children who had crowded at the scene with jerry cans and buckets in the hope of collecting fuel for sale or personal use, witnesses said.
Despite its oil riches, the vast majority of Nigerians remain impoverished, living on less than $1 a day, tempted by the opportunities to obtain free fuel in spite of the dangers.
More than 400 people died in two similar pipeline explosions in Lagos in 2006. Authorities blame the disasters on criminal gangs who break into the pipelines to siphon fuel for sale, attracting crowds of people who come in their wake to scavenge for fuel.
